Investing Strategies Compared: Nine Approaches, the Same $10,000, 2007 to 2026
Michael Whitman
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Trading since 2017, full-time since 2020
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YouTube creator, 137K subscribers
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Published 2026-11-07
An investing strategy is a standing rule for what to own, how to put money in and who picks the holdings. On Vanguard index fund data from 29 Dec 2006 to 30 Oct 2026, $10,000 grew to between $17,596 in bonds and $105,162 in growth stocks.
An investing strategy is a standing rule for three things: what you own, how the money goes in, and who picks the holdings. Change any one of the three and the result changes, often by tens of thousands of dollars on the same starting sum.
Most lists of investing strategies stop at names and pros and cons. This page runs nine of them on the same $10,000, the same dates and real fund prices, then tests the other two questions on decades of data.
| Approach | Built from | $10,000 on 29 Dec 2006 was worth on 30 Oct 2026 | Per year | Worst fall | 2008 | 2022 |
|---|---|---|---|---|---|---|
| Growth stocks | VIGRX | $105,162 | 12.60% | -47.19% | -38.32% | -33.22% |
| S&P 500 index | VFINX | $75,851 | 10.76% | -50.97% | -37.02% | -18.24% |
| Whole US market | VTSMX | $73,895 | 10.61% | -50.89% | -37.04% | -19.60% |
| Dividend growth | VIG | $68,422 | 10.18% | -41.12% | -26.69% | -9.80% |
| Value stocks | VIVAX | $54,452 | 8.92% | -54.87% | -35.97% | -2.17% |
| Three-fund, 60/20/20 | VTSMX, VGTSX, VBMFX | $48,112 | 8.24% | -42.96% | -30.02% | -17.62% |
| 60/40 stocks and bonds | VTSMX, VBMFX | $45,101 | 7.89% | -30.71% | -20.19% | -17.05% |
| International stocks | VGTSX | $25,753 | 4.89% | -58.48% | -44.07% | -16.07% |
| Bonds only | VBMFX | $17,596 | 2.89% | -17.53% | +5.09% | -13.24% |
All nine are Vanguard index funds or mixes of them, so the comparison is between rules, not between managers. “Worst fall” is the largest drop from a month-end high to a later month-end low.
How it works
The first question is what to own, and it decides most of the outcome. The split between stocks and bonds sets both the growth and the size of the falls; in the table, no mix with a bond fund finished above $48,112, and none fell more than 42.96%.
The second is how the money goes in. All at once, or spread over months on a schedule. That only matters while money is waiting to be invested, which is why it is a smaller decision than the first.
The third is who chooses the holdings. An index fund owns a market at its weights for a small fee; an active fund pays a manager to depart from those weights and has to beat the index by more than its costs.
Styles like value, growth and dividend growth sit between the two. Each is a rule for tilting away from the whole market.
Everything else is a variation. A target-date fund is the stock and bond question on a schedule; a robo-advisor is the same question automated; “buy and hold” is a promise about behavior that can sit on top of any of them.
The original data
What was measured: monthly adjusted closes from Yahoo Finance for seven Vanguard funds, which reinvest dividends and distributions and are net of each fund’s own costs.
Mixes were rebalanced back to target at every December close. The window runs 238 months, from 29 Dec 2006 to 30 Oct 2026, chosen because it is the longest one in which all seven funds have prices.
The two approaches that fell least in 2008 finished near the bottom. Bonds alone gained 5.09% in 2008 and finished last. The 60/40 mix lost 20.19% that year, against 37.02% for the S&P 500 fund, recovered its 2007 high in 36 months instead of 58, and finished seventh of nine.
The exceptions run both ways. Dividend growth fell less than the S&P 500 fund and finished $7,429 behind it, while international stocks fell most and finished eighth.
2022 broke the pattern for one year. Stocks and bonds fell together, so the 60/40 mix lost 17.05% against 18.24% for the S&P 500 fund. The bond fund lost 13.24% and on 30 Oct 2026 was still 3.65% below its 2020 high.
Check on the data: over the same window the S&P 500 fund trailed Yahoo’s S&P 500 Total Return index by 0.14 points a year, $75,851 against $77,814, which is the cost of owning an index through a real fund.
Yahoo’s prices were also checked against Vanguard’s own published calendar-year returns for 2011 to 2025: compounded from December 2010 to October 2026, each of the six Vanguard mutual funds came within 0.11% of Vanguard’s figure, so capital gains payouts are counted as well as dividends. All the figures are in the published monthly file.
The order is not permanent. Over the ten years from Dec 1996 to Dec 2006, using the same funds, value stocks earned 9.44% a year and growth stocks 7.14%, the reverse of the table.
Across all 289 rolling ten-year windows from October 1992, growth finished ahead in 189 and value in 100, every one of those 100 starting between October 1992 and November 2003.
All at once or month by month
Lump sum beat monthly buying in 76.37% of start months. For every month from January 1985 to November 2025, $12,000 put into the S&P 500 fund at once was compared with $1,000 at each of 12 month-end closes, the waiting cash earning the 3-month Treasury bill rate.
The lump sum was ahead after the twelfth purchase in 375 of 491 cases.
The typical gap was small. The median result favored the lump sum by $527 on $12,000. When monthly buying won, the median margin was $611.81; when the lump sum won, $813.93.
Monthly buying won when a crash followed the start. Its biggest win began in August 2008: the lump sum was worth $9,477 by July 2009 and the monthly buyer $13,063.
In the 2000s, with two bear markets, the lump sum led in only 56.67% of start months. The numbers for any amount can be rerun in the DCA vs lump sum calculator.
For most people the question never comes up. Money saved from each paycheck is invested as it arrives, so it is already being put in month by month.
Index or active
S&P Dow Jones Indices counts this every six months. In its SPIVA U.S. Scorecard for mid-year 2025 (data to 30 Jun 2025, the latest edition we could open at its source), 85.98% of actively managed US large-cap funds trailed the S&P 500 over 10 years, 88.29% over 15 years and 91.03% over 20 years.
The 20-year figure includes funds that did not last. Only 34.70% of the 758 large-cap funds alive at the start of the 20 years were still running at the end, and the scorecard keeps the closed ones in the count rather than scoring only the survivors.
That is the arithmetic behind passive vs active: the group earns the market before costs, so after costs most of it has to trail.
A worked example
Take $10,000 on 29 Dec 2006 and compare two holders. One buys the S&P 500 fund; the other puts $6,000 in the whole US stock market fund and $4,000 in the bond fund, and rebalances every December.
At the February 2009 low, the 60/40 holder looked right. The stock-only account was worth $5,431 and the 60/40 account $7,522, a lead of $2,091 at the moment selling was most tempting.
By 30 Oct 2026 the order had flipped by a wide margin: $75,851 against $45,101, a gap of $30,750. Neither result is a mistake. The 60/40 holder bought a smaller fall and paid for it in growth, and the bill grew with every year the S&P 500 fund compounded at its 10.76% average.
The three-fund version sat between them. $6,000 US stocks, $2,000 international and $2,000 bonds fell to $6,411 in February 2009 and finished at $48,112, held back mainly by international stocks, which took 115 months to regain their 2007 high.
When it fails
The most common failure is choosing by the last ten years. Growth topped the table from 2007 to 2026 and trailed value from 1997 to 2006. A strategy picked because it just won is a bet that the same decade comes back.
The second is a mix that cannot be held. The S&P 500 fund finished first among the broad funds, but only for someone who sat through a 50.97% fall and 58 months below the 2007 high. A holder who sold in February 2009 kept $5,431 of the $10,000.
The third is treating bonds as safe from loss. The bond fund fell 17.53% from its 2020 high and had not recovered by October 2026, the same years stocks also fell.
A fourth is going abroad and waiting. International stocks are a diversifier on paper, and from 2007 they lost 58.48% and needed almost ten years to get back.
A fifth is paying for a manager without checking the record. Over 20 years more than nine in ten large-cap funds trailed the index, and most of them no longer exist.
And a sixth is reading this table as a forecast. It is one 20-year window from one country, and every row would rank differently over a different twenty years.
Questions people ask
What are the main types of investing strategies?
Grouped by the question they answer: what to own (stock and bond mixes, styles such as value, growth and dividend growth), how to buy (lump sum or a schedule) and who picks (index or active).
Which investing strategy has the best returns?
It depends on the window. From 2007 to 2026 growth stocks returned 12.60% a year in this test; from 1997 to 2006 value stocks led at 9.44%. Higher-return rows also carried bigger falls.
Is it better to invest all at once or monthly?
On the S&P 500 fund since 1985, all at once won 76.37% of the time over a 12-month spread. Monthly buying won mostly when a crash followed.
What is the best investing strategy for beginners?
There is no single answer, but the evidence on this page favors low costs, a mix that can be held through a 30% to 50% fall, and a schedule that does not need decisions.
Related
The two mixes in the table have their own pages: the three-fund portfolio and the sixty-forty portfolio.
What an index fund holds and what it costs is covered under index funds, and the dividend growth row is explained on dividend growth. For the style question, growth investing vs dividend investing compares two of the tilts directly, and international stocks covers the row that lagged most.
For what happens after you pick one and hold it for decades, see long-term investing.
This page is educational, not financial advice. Test every idea on your own charts before risking money.