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.

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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Valuable Resources

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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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