One of the best reads is "Agony & Ecstasy" by JP Morgan from 2014.
It found that 40% of all stocks experienced catastrophic declines, when defined as a 70% decline from peak value with minimal recovery. This was lowest for Consumer Staples and Utilities.
The median stock did worse than the stock market.
Two-thirds of all excess returns vs. the Russell 3000 were negative, and for 40% of all stocks, returns were negative in absolute terms.
The right tail is ~7% of the universe and includes companies that generated excess returns.
Consumer Staples seemed to offer the best risk/reward of any other sectors. They offered the smallest %-age of failures, and an above percentage of companies that generate excess returns. Long-term Dividend Growth Investors are familiar with consumer staples sector, as it has overwhelmingly generated long track records of annual dividend increases. Historically, up to this point at least.
This study is one of the best reasons against the mantra to concentrate a portfolio.
Diversification would have provided protection for preserving family wealth.
A partial list of exogenous factors that can put companies at risk and which are outside management control
Diversification is a healthy admission that you can be wrong for reasons you can’t predict.