What if I told you that trying to be smart with your portfolio could secretly cost you $11,620?
Yes — not because you took too much risk…
…but because you tried too hard.
Over the last 10 years, two investors each started with $10,000.
One followed the classic advice: “Diversify into US stocks, international stocks, and bonds.”
The other ignored all of that and just bought the S&P 500.
You probably think the diversified investor won, right?
Wrong.
Very wrong.
By November 2025, the diversified investor’s money grew into $28,522.
But the simple investor — the one who did NOTHING fancy?
His final amount was $40,143.
That’s a 40% wealth advantage…
…for doing less, not more.
Let’s break down what actually happened, why simplicity crushed complexity, and why this decade might never repeat itself.
🚀 The Investors: Sarah vs. Mike
January 2015.
Two people, same starting point, same $10,000.
Sarah — The “Smart” Investor
✔ 60% US stocks
✔ 20% international stocks
✔ 20% bonds
✔ Reads all the investing books
✔ Rebalances like a pro
Mike — The Lazy Investor
✔ Bought a single S&P 500 index fund
✔ Never rebalanced
✔ Never touched it
Fast forward to November 2025…
Final Results
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Sarah: $28,522 (11.05% annual return)
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Mike: $40,143 (14.91% annual return)
-
Difference: $11,620
If they started with $100,000, the gap becomes $116,000.
That’s a new car, a house deposit, or early retirement — all because Mike kept it simple.
📉 Year-by-Year: The Rollercoaster
2015:
S&P: +1.38%
International: –4.18%
➡ Sarah’s diversification hurt her right away.
2016–2017:
Tech boom begins
S&P: +11.96% → +21.83%
➡ Mike’s simple money machine starts flying.
2018:
Market falls
S&P: –4.38%
➡ Both struggle, but survive.
2019:
S&P explodes: +31.49%
International: +21.75%
➡ Sarah misses out on BIG US growth.
2020:
Pandemic crash → violent rebound
S&P: +18.40%
➡ Tech dominance accelerates.
2021:
Peak euphoria
S&P: +28.71%
2022: The Year Everything Broke
S&P: –18.11%
Bonds: –13.09% (supposed to protect you!)
International: –16.09%
➡ Diversification FAILED.
➡ Everything fell together.
➡ Risk was the same — returns weren’t.
2023–2025:
AI boom explodes
S&P: +26.29% → +25.02% → +17.18%
➡ The Magnificent 7 lead the market into orbit.
Mike’s single fund outperformed almost every diversified approach.
💥 Why Simplicity Won (And Why It Might Not Last)
1️⃣ The Magnificent 7 Monopoly
Microsoft, Apple, Nvidia, Amazon, Tesla, Meta, Alphabet.
Seven companies drove 30–40% of all S&P 500 gains.
International markets couldn’t keep up because:
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US dollar was too strong
-
China cracked down on tech
-
Europe/Japan experienced slow growth
-
International funds lacked tech exposure
US tech was on fire. That’s why Mike won BIG.
2️⃣ Bonds Became a Wealth Destroyer
For decades:
“When stocks go down, bonds go up.”
But in 2022, both fell together:
-
Stocks: –18%
-
Bonds: –13%
➡ Diversification broke.
Bonds returned only 2.1% annually over the decade — a dead weight dragging Sarah down.
3️⃣ Complexity = Higher Fees + More Mistakes
10-fund portfolios underperformed because of:
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Higher fund fees
-
Rebalancing costs
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Tax inefficiency
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Buying losers, selling winners
Data shows:
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1 fund: ~14.91%
-
3 funds: ~11.05%
-
10 funds: 9–10%
More funds = more friction.
More friction = less money.
⚠️ But Here’s the Twist: This Decade Was Not Normal
This 2015–2025 period was extremely unique:
✔ US tech dominance
✔ Strong USD
✔ Worldwide economic slowdown
✔ Bond market chaos
✔ China’s regulatory crackdowns
Historically, market leadership rotates:
-
1970s → International outperformed
-
2000s → International outperformed
-
2010s–2020s → US dominated
Nothing stays king forever.
🎯 So What Should You Do?
If you're young (20–40):
➡ Heavy S&P 500 exposure makes sense.
➡ You have time and tolerance for volatility.
If you're mid-career (40–55):
➡ Use S&P 500 + some diversification.
➡ Don’t bet your entire future on tech.
If you're near retirement (55+):
➡ Don't abandon diversification just because one decade favored the US.
➡ Capital preservation matters more than bragging rights.
If you’re thinking about 10 different funds:
➡ Don’t. Just don’t.
Data is brutally clear: it’s a waste of money.
🧠 Key Takeaways (The Stuff You Should Screenshot)
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Simplicity crushed complexity: $11,620 difference.
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1 fund > 3 funds > 10 funds in this decade.
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Bonds failed to protect investors in 2022.
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Tech dominance is not guaranteed to repeat.
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Market winners rotate — nothing stays number one forever.
💬 Are you Team Diversify or Team S&P 500?
Comment below — I want to see where you stand!
If this breakdown helped you, hit Like, share it with your investing friends, and stay tuned. I’ll be testing even more real-data portfolios.
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