My Investment Portfolio: 2022

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The stock market soared yet again this past year, in the middle of a pandemic and even with signs of inflation looming. Markets are unpredictable. Sometimes the surprises are good ones. But we’ve had a lot of those the last few years, so be prepared for some inevitable bad surprises ahead.

Stock certificates

In 2021, the Dow Jones Industrial Average gained almost 21% including dividends.

My conservative and diversified retirement portfolio once again returned double digits for the year. All of my holdings gained, except for intermediate bonds and gold.

If you’re a seasoned investor, you know not to construct a retirement strategy based on continued double-digit returns. We have been very fortunate to see such a scenario unfold, and it won’t go on forever.

For retirees living off assets, caution is always advised. I’ve been in a defensive posture for most of my investing life, holding a roughly equal stock/bond asset allocation.

Read on for my annual portfolio performance report….

Current Holdings

My investment philosophy has not changed since last year, but my holdings have. That’s because I’ve diversified into Schwab ETFs. More on that move below. But, big picture, I still hold a small number of low-cost index funds in a similar asset allocation:

FundSymbol(s)Expense Ratio% of Portfolio2021 Return
Vanguard Wellesley IncomeVWIAX0.16%34.5%8.57%
Vanguard FTSE Social Index FundVFTAX0.14%15.6%27.71%
Schwab International Equity ETFSCHF0.06%11.4%11.42%
Schwab Intermediate-Term U.S. Treasury ETFSCHR0.04%9.1%-2.57%
Schwab U.S. TIPS ETF SCHP0.05%7.2%5.80%
Vanguard LifeStrategy Moderate GrowthVSMGX0.13%6.2%10.08%
SPDR Gold SharesGLD0.40%3.60%-4.14%
digital currencies9.9%96.20%

(Note: Portfolio percentages are as of 12/31/2021. Overall return is not necessarily a weighted average of individual returns, because holdings changed slightly during the year.)

Overall, my portfolio is currently allocated about 44% in stocks, 40% in bonds, 14% in gold and digital currencies, and 3% in cash, taking into account the actual reported cash holdings in all of my funds. (The cash return stated in the table above is approximate. I don’t have a simple way to average my different cash accounts.)

Of the stocks, 29% is international. (Taking into account the actual reported international holdings in all of my funds, not just in those funds labeled “International.”) I continue to favor a relatively large allocation to international as a diversification away from the U.S.’s potential long-term economic woes, including debt.

Purchases and Sales

The main positions I sold this year were from my stock funds. That was to generate income to cover living expenses.

I confess I speculated in an IPO. Overconfident perhaps from my Bitcoin success over the years, I put a small amount into Coinbase, the leading cryptocurrency broker. I’m a Coinbase customer and knew they offered a good service.

But that doesn’t mean the stock was correctly valued at IPO. Apparently it wasn’t. My investment is now worth about two-thirds of what I paid for it. I’ll keep it a few more years, then likely sell it at a loss — the price for another lesson in investing humility.

Alternative Investments

My originally tiny Bitcoin and digital currency position had another good year. But only the most seasoned investors, who can also afford to lose it all, should even consider digital currencies. I don’t think they have any role in the average retirement portfolio.

Gold has had a long-term role in my investment portfolio. It’s both grown in value and been an effective diversifier for me. There are good arguments both for and against gold as an investment hedge. You hold gold for the bad times. So this was not a good year for gold.

Related: Going for Gold?


Late in 2020, we finally bought a house. The timing, while not perfect, was good. A sea change has been underway around us: The pandemic has induced affluent workers and their families to bail out of the big cities to smaller towns like ours.

Zillow says our house has increased 20% in value over the past 12 months. Anecdotal evidence from the neighborhood confirms this.

We paid cash, so we liquidated most of our emergency cash stockpile, and our taxable investments, for the worthy goal of securing a long-term home. Thus most of our taxable assets have turned into home equity.

Conveniently, the assets we sold resembled our remaining holdings, so our overall asset allocation didn’t change much. And we still have a sizable retirement portfolio with the well diversified holdings listed in the table above.

Also, our real estate investment has done as well as the stock market, so we’ve suffered no drag on our net worth.

Retirement Income

The house purchase has impacted our financial life less than I feared, but there have been some changes. Instead of keeping about two years of cash on hand, nowadays, I keep about three to six months. I need to sell from our investments more often.

As much as I have studied and written about systematic retirement withdrawal strategies, I still don’t use one. They are fine as an academic exercise, to understand how your money will last under different conditions. But, in my opinion, there is no autopilot solution to retirement withdrawals that doesn’t potentially leave money on the table, or expose you to undue risk. Needs and markets fluctuate year to year. You have to respond.

My work with retirement calculators tells me that we are financially comfortable, as long as our spending stays within our historical boundaries. We are ten years older now than when we early retired, and it’s hard to be worried about our finances unless our net worth starts dramatically decreasing for several years, which it hasn’t.

When I sell holdings every few months to fund our living expenses, I keep an eye on PE ratios, and tend to sell stock instead of bond funds when those ratios are high, as they have been for most of our retirement. Also, those sales, coming mostly from a traditional retirement account, are taxable. So I keep an eye on the realized income and the proximate tax brackets, especially toward the end of the year.

Related: Early Retirement Tax Planning Checklist

Some day an immediate or charitable annuity may be useful to simplify our financial life. But annuity payout rates continue in the gutter. just quoted me about 4.7% for a lifetime annuity. I think we can do better than that with a simple, inexpensive portfolio of passively-managed stock and bond funds. In fact, we have done so, for nearly two decades now.

Administrative Diversification

The house purchase left us with almost all of our investable assets in retirement accounts at Vanguard. I’ve been with them since the beginning, and I have been satisfied. But Vanguard has been criticized lately for customer service issues and for flirting with riskier investment vehicles like private equity.

I decided it was time to diversify. My concerns were not so much with the company failing, as with systems failing and denying us access to our money. All human institutions are fallible, and who hasn’t experienced some sort of banking or investment glitch in recent years?

So I decided to move roughly half of my retirement savings to Schwab, the other institution I have a long relationship with. For my diversification objectives, it wasn’t enough to simply transfer some of my existing Vanguard funds to a Schwab account. I also needed to diversify away from the Vanguard funds themselves. For that, I chose several Schwab passively-managed index funds that were very similar to their Vanguard counterparts, including razor-thin expense ratios.

As far as I can predict, my portfolio should behave about the same as in the past. And certainly this year produced no surprises.

Overall Returns

My overall investment return for 2021 was 14.65%. That compares to 10.08% for the Vanguard LifeStrategy Moderate Growth Fund (VSMGX) — a possible benchmark for my balanced portfolio that holds about 60% stocks and 40% bonds.

The geometric mean of my returns going back for the 17 years I’ve closely tracked them now is at 7.7%. That’s a respectable average for a conservative portfolio in these times, including the 2008-2009 Great Recession. You can live extremely well in retirement if you can count on almost an 8% long-term return, though you probably shouldn’t.

And how about you? How did your portfolio fare in 2021?

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Note: Please understand that I am not a financial advisor and cannot give personal financial advice or discuss investments other than my own. My portfolio is just my portfolio. I’m not recommending it for anyone else. It’s a real-life portfolio that has been assembled and pruned over many years, much of it long before we all knew as much about investing and early retirement as we do now. This is not necessarily the portfolio I would design from scratch today. That said, over a decade of retirement, it has grown steadily and supported a comfortable lifestyle for us. 

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[The founder of, Darrow Kirkpatrick relied on a modest lifestyle, high savings rate, and simple passive index investing to retire at age 50 from a career as a civil and software engineer. He has been quoted or published in The Wall Street Journal, MarketWatch, Kiplinger, The Huffington Post, Consumer Reports, and Money Magazine among others. His books include Retiring Sooner: How to Accelerate Your Financial Independence and Can I Retire Yet? How to Make the Biggest Financial Decision of the Rest of Your Life.]

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  1. Nice job buying a house in 2020! We found a larger one as well, which has been really good for my two young children. Feel so blessed!

    SF property prices went up about 12% in 2021, below the national average. Our investment portfolios went up 24.5%, underperforming the SP 500. But we’ll take it!

    My review in the website URL. Do you have any forecasts for 2022? I’m trying to get more folks in the PF world to share and make theirs. It’s fun!


  2. HI Darrow, thanks for the input on this. Can you advise what your overall 2021 return was for 2021 with out the digital currencies?


  3. Question: How do you move a Vanguard proprietary fund to Schwab without incurring taxable gains?

    1. Funds in a tax-deferred retirement account can be transferred between and sold within the account without any tax consequences. Taxes will be owed at ordinary income tax rates when the money is taken from the accounts.

  4. My Portfolio returns were 18% mostly in MFs, Small Cap, Midcap and Global Stock MF returned negative

  5. Opposite side of the coin, I sold my house. It sold two days after listing. I received twenty percent over listing price – But barely over what I paid for it during the peak in 2006. Never mind, what I put into it over the years. I was happy to get rid of it (Not really, it was a beautiful place with loud neighbors). I am now renting. My rent is much higher than what my mortage was, but the peace and tranquility (Where I live now) is absolutely worth it. Incredibly…. I ran reports on capital gains minus what I spent on that house during the past fifteen years. It ended up being, almost to the dollar, what I spend in rent now. I feel amazing because I saw the price in that house at a point being fifty percent of what I paid for it. Sickening feeling to say the least.

    Amazingly, I also sold my almost two year old truck for $6000 more than what I paid for it!

    2021 Was economically, a great year. I retired two years ago (Was 58). I love THE FREEDOM!

  6. Hi Darrow
    Except for the differences in brokerage relationships (we use Fidelity and TD Ameritrade), your early retirement strategy almost literally mimics ours and as self directed investors, I’m always concerned if we’ve made the right choices. So your year end summary comforts since our return and asset allocation are quite similar except that we use actively managed funds because I aim to beat the index rather than earn it. We live in Canada using all US assets so we take advantage of currency advantages but have complicated taxes in two nations. Cheers and happy new year

  7. Moving some of your funds to Schwab from Vanguard interests me, because I’m thinking about doing that. When I retired four years ago, I consolidated multiple accounts, and deliberately put roughly equal amounts at Schwab and Vanguard. Schwab is a taxable account, and the one I’ve used since I retired, to buy a new house and do tax gain harvesting during low-income years before pension and SS. So now the Vanguard account is much bigger. VG has my pre-tax IRA and my Roth IRA, so I guess to move some money to Schwab I’d need to open an IRA and/or a Roth at Schwab. I remember what a hassle it was four years ago to roll over my 401(k) into an IRA at Vanguard, so I’ve been procrastinating about tackling this.

  8. perhaps consider swapping GLD for IAU if not in a taxable account (which it shouldnt due to the higher tax rate). It has outperformed over every time period due to the lower expense ratio.

  9. Hi Darrrow, thank you for sharing your portfolio returns, investment changes and strategies with us. Appreciate the insights in a real world portfolio that is used to live off of. The house purchase decision was a good one I think and shows good flexibility in your thinking to adjust when necessary to changing conditions. Have a great 2022!

  10. For those moving money to new brokers, don’t forget to ask for your new account bonus. If you’re going to go through the trouble to transfer, at least get some free money out of it. I consolidated my wife’s retirement accounts at Schwab a little over a year ago and picked up a bonus. Schwab requires a referral but since my mom was a customer, I just had here take 3 minutes to make the referral and emailed me the link. From there, all you do is enter the referral code and transfer in-kind using the same standard Schwab process. Most other brokers also offer new account bonuses (eTrade, Ally, Fidelity,TD Ameritrade).

  11. This is amazing to get this information. I am new and trying to get to the retirement place all these folks are.. I struggle with the “how much” should I have to feel comfortable with walking away from everything.. I am a Retired banker at 49 and work part time as a business broker/ commercial real estate broker.. Assets are 8mm with commercial real estate (free and clear) making up a large majority with great rental income from national tenants. Lots in Private loans that generate 10%+ with the rest in rolled over IRA/SEPS…. For me its the anxiety (of which I have learned is real) of not having enough…. Would love some feedback on the mindset that allows the readers here to have the confidence to stop it all and enjoy life…. Very jealous

  12. ” I’ve been in a defensive posture for most of my investing life, holding a roughly equal stock/bond asset allocation.”

    This is a terrible strategy as bonds have performed unacceptably bad. All investments should be aggressive as they are all long-term investments as most people have a wife or children to inherit investments should you kick the bucket. Even in retirement, invest aggressively with just a year of liquid funds available to pull from for income should a bear market arise (which historically last a very short time). Invest in VTI, VGT and VOO with expense ratios as low as 0.03%, a factor of over 5X better as your underperforming Wellesley fund. Drop the gold, drop the crypto speculative investment, drop the International investments that annually underperform US sector.

    1. Reply To “Crash davis” – This was extremely poor investment advice to provide to the readers of this bloo. I could pick it apart sentence by sentence but my guess is that it would fall on deaf ears. One thing I will note is the criticism of international exposure. This would be malpractice if coming from an investment advisor, and borders on ridiculous. Good luck to you moving forward, plan for some dark days ahead in your financial future.

      Darrow – another great post by you, thanks for sharing once again.

      1. “Good luck to you moving forward, plan for some dark days ahead in your financial future.”

        As I am outperforming the SP500 by 40% the last 5 years, your comment is hilarious and somewhat pathetic. i sleep quite comfortably at night with my investments and actually understand statistics unlike you. And you nor nobody can predict the future performance of the stock market, don’t kid yourself.

  13. Thanks Darrow for the update. The 14% plus return in your fairly conservative portfolio is quite decent. Also your longer term 7-8% annualized return is great for a retirement portfolio. I am gradually transitioning to a more passive portfolio consisting of Vanguard ETFs. By the way, it is quite interesting that you have transferred some of your holdings to Schwab as a way to diversify your financial institutions/brokers. That is quite new to me an I had never thought about diversification that way. Keep it up and thanks for the update.

      1. JC,

        Thanks for supplying your numbers and investment choices. Just goes to show that you can retire ar the worst of times and still be ok with a good plan.

  14. Thanks for sharing and congratulations on that nice return. Your posts over the years have been invaluable in helping me plan for my own retirement. I find it interesting that some aspects of your portfolio seem much more aggressive (crypto) or conservative (the large bond position) than my asset choices yet it all seems to work out. Have you found that the income (dividends and bond coupons) thrown off by your positions eases your draw down strategy? Over the past few years I’ve been playing catch-up in adding REIT and foreign stock index funds to my asset mix and the higher dividends they pay make me wonder if I’ll even need to sell positions to support cash flow but I haven’t figured out if that is going to distort my portfolio. Grateful for your insights.

  15. Hi Darrow:

    Two months ago, I read that your rough “best case” for a 50/50 portfolio moving forward was about 3.8% real rate of return. Yet, this recent post calls the quote for a 4.7% immediate annuity return “in the gutter.”

    Can the apparent contradiction be explained by the different timeframes involved?

    Yes, you have done well the past two decades, but this is a future decision. BTW, I’m not connected to the annuity industry. I am grappling with the decision to annuitize some of my portfolio, just like you (and I appreciate your precious posts on this topic).

    I am very grateful for and have learned a lot from this blog. Happy and healthy 2022, HughO

    1. Hugh O.,

      I don’t want to speak for Darrow, but he generally avoids spending time on the comments and I think this is an interesting question, so I’ll give you my take.

      First, no one knows the future. 3.8% real return may be too conservative estimate, or given our starting point it may be too high over the next decade or so. No one knows. We all have to make decisions with imperfect information.

      What we do know is that the annuity is fixed. The 4.7% quoted is nominal. So over time, while you’re getting the same $ amount in 5, 10, or 20 years from an annuity payment, that fixed $ will almost be guaranteed to not provide the same purchasing power it does today.


      1. Thanks, Chris. Yes, we need to make decisions about the uncertain future.

        My take-away is to add annuities to the list of assets such as cash and bonds, that are good to hold during deflationary (or for annuities, very low inflation) time periods. As opposed to assets generally good to hold during inflationary periods, such as stocks and real estate.

        I’ll refer back to previous (not precious, see above — darn spell check) posts about how much to annuitize assets. Probably less if one predicts high inflation and more if one predicts low inflation or deflation. I’d love to see your thoughts on this in a future post.

        Best and with gratitude, Hugh

  16. Hi Darrow,
    I was curious what your thoughts might be comparing Gold to the Wilshire Total Return Index (dividends are reinvested). Since June 1978 Gold gained 871% while the Wilshire gained 15,400%.
    Also now that you have bought a house I was reading a lot about getting a Line of Credit from a Home Equity Conversion Mortgage (HECM) once you turn 62.
    One can dip into the LOC when the market is down and pay it back when the market is up allowing one to have less cash in the portfolio. Also using the LOC is tax free.
    Any thoughts on this?

    1. @Steve- I can’t speak for Chris, but I can tell you that we had a HELOC for years and when the recession hit in 2008-2009, our bank cancelled it without us ever having used it. I don’t think I would rely on having a LOC available as an emergency fund when you are at the whim of banks who can close your account with a few weeks notice.

      1. Steve,

        I’m pretty debt averse and for that reason I don’t like the strategy of using a HELOC as an emergency fund even if the math may make sense. On a practical note, I’ve written about this in the past and had several readers who did utilize this approach share Charles experience of having the LOC go away when you would most want to use it.

        Re: gold. Darrow and I just were discussing this. He shared a quote from one of his investing mentors who said that you want gold to be doing bad, because that means everything (or at least something) else in your portfolio is doing well. The reason for gold isn’t that you would reasonably hope it would outperform stocks, or likely even bonds. Instead, it is there (in small amounts if you choose to have any) as a diversifier for when everything hits the fan.

        Hope that helps.

        1. Thanks Chris. I felt that 3.6% seems a lot in somebody’s portfolio for gold that has not really been a great tool to diversify ones investments. Why spend this money just to see that when gold is not doing well everything else is doing well? Also, over time (however one might believe in it or not) I think that cryptocurrencies and digital currencies will take on that role that gold may have had in the past.

      2. Sorry this happened to you, Charles. My understanding is if one obtains a FHA insured HECM, it cannot be called or cancelled for any reason. This is why it costs more than what some banks charge but then their HECM is not insured and those banks will cancel the LOC if not used or if the property value drops.
        If not used the LOC grows over time and the proceeds are tax free. It is a non-recourse loan, payments are not required and the original borrower can remain in the house (till death or moving out) even if more money is owed than what the house is worth. The FHA guarantees that neither the borrower nor their heirs will owe more than the home is worth at the time it is sold. Noble prize winner, Robert Merton (M.I.T Economics professor) states regarding an FHA insured HECM, that a house should be viewed as an annuity while you live in it. He views it as a financial asset that ultimately gets sold when one doesn’t need it, but you use it during retirement when you do need it. He states that retirees should place mainlining their own standard of living ahead of leaving a bequest. I just retired and I have become sick hearing about ‘sequence of return risk’ as if there is anything I can do about it. I think having a LOC via a FHA insured HECM takes care of this issue.

          1. Yes, Brian. info is from a lot of articles but also from a $10 book by Dan Hultquist Understanding Reverse, that is updated yearly. He also has a blog.

  17. Thanks, Darrow, for your annual update. This Blog and the books you both have written have added a lot of value in the PF space, and for our family.
    To answer your question on how did our retirement portfolio do in 2021 we were at 14.2% with a conservative retirement asset allocation.

  18. Darrow, I just started reading this blog and am appreciating what you and Chris have accomplished. As far as my 2021 portfolio, it earned right around 20% in 2021 using an advisor with 7 different American Funds.

    I am aware of the expenses of going with an advisor, which is right around .7%, which is the average fund expense. We only pay the .7% and the advisor gets his “share”of the .7% from the American funds. I have long been considering getting rid of the advisor along with the .7% fee. What keeps me with them is that for approx. 20 years I have been with them, the account has produced an average annual return of around 9%. This 9% return is calculated after expenses.

    Do you think the 9ish percent average annual return is worth paying the .7%? I have put the .7% on a compounding calculator and there is a staggering difference over 25 years. I’m not totally against expenses, if the return warrants the price. I have always heard that the unmanaged index will more than likely outperform managed funds, but in my case, the American funds seem pretty competitive.

    I would appreciate your input on my situation. Thank you, John

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