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Positioning Retirement Portfolios For 2022

Charles Bolin profile picture
Charles Bolin


  • I track nearly 200 quality funds representing about 90 Lipper Categories using Mutual Fund Observer that are available no-load and/or no transaction fee at either Vanguard or Fidelity.
  • The funds are ranked by stage of the business cycle, momentum, money flow, risk and room for further growth.
  • Moderately Conservative Model portfolios are updated for funds available at Fidelity and Vanguard.

Sports girl who wants to start the new year 2022. Concept of new professional achievements in the new year and success

Galeanu Mihai/iStock via Getty Images

What Will 2022 Bring?

Nouriel Roubini, who in 2006 warned of the credit and housing bubble, lists some of the potential outcomes for this year in Clouds Over 2022:

As long as central banks were

This article was written by

Charles Bolin profile picture
I use Mutual Fund Observer MultiSearch as the primary tool to analyze and rank funds based on risk, momentum, quality, income, and consistency factors. I classify nearly 300 funds each month by investment buckets for risk and trends. I began contributing to the MFO monthly newsletter in 2019.I retired in June 2022.  I am an individual investor and retired engineer with an MBA.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of FMSDX, TMSRX, FSRRX, CTFAX, TRRIX, REMIX, FBALX, FSMEX, NWFFX, FLPSX, CRAAX, FSTUX, EAPCX, FDFAX, VGWAX, VWIAX, COTZX, VGYAX, VCMDX, VDC, VWELX, VPU either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am an engineer with an MBA nearing retirement and not an economist nor an investment professional. The information provided is for educational purposes and should not be considered as advice. Investors should do their due diligence research and/or use an investment professional. In September 2019, I began contributing to the Mutual Fund Observer monthly newsletter.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (38)

sc21 profile picture
In light of this year's events, which of the funds covered here do you think are most suitable for the present situation? You cover so much ground that hard to keep up with you. Much appreciate all of your efforts. SC
raopa profile picture
@Charles Bolin Do you like value dividend appreciation fund like TGIGX for retirement? Also any opinion on TCW fund family like User friendly etc.? Thanks.
Charles Bolin profile picture
@raopa Sorry for the late reply. I have been enjoying retirement.

Equity Income has been a strong relative performer this year and TGIGX fits into the middle of the pack of Fidelity and Vanguard equity income funds. Tax efficiency is below average, but in a tax advantaged account that won't matter.

I mostly track funds available at Fidelity and Vanguard and don't follow TCW. Some observations using MFO are that their fees are a little on the high side. TCW's Fund Family rating is below average while their Ferguson Mega Ratio is above average. Their risk adjusted performance ranges from average to above average. TCW doesn't have a large number of equity funds and the assets under management are relatively low.

The Wikipedia link is below:


I have been locking in treasury yields in a ladder which will cause me to shift more from mixed asset funds to equity funds. In this environment, I do favor equity income funds including dividend appreciation and dividend growth.

I hope this helps.
thumb.ai profile picture
@Charles Bolin Charles, miss your thoughtful articles. Any chance of a 2023 positioning article?
raopa profile picture
@Charles Bolin 1.Follow up of your above comment on dividend appreciation, Do you like any of the dividend appreciation Etfs (which are tax efficient) for 2023?
2.Capital group released dividend Etf CGDV in 2022 and trading about 1 million shares/day and outperforming. Do you have any opinion on CGDV?Thanks.
Walt Lee profile picture
Charles, Thank you for this information. I’m retiring this year at 61 and have most of my money in an aggressive growth format which I attribute to retiring earlier than 65. I’ve been following the Vanguard Wellesley fund and Wellington fund and have been planning on putting a great deal of my retirement savings in these. I won’t have to touch my retirement savings for another 5 years and can just let it grow. Thanks again for the article.
Belated thanks for this article. Found it searching for cyclical tactical asset allocation strategies. Plenty to study for my own adjustments.

Unfortunately, all TAA mutual funds have performed poorly so those that managed by individuals seem to do better. I also keep core holdings and move funds to sectors that should outperform. But, it does cause big tax consequences when profits are large and a sector starts selling off dramatically as the cycle shifts (as last few months have shown).

Yellowstone and the Grand Tetons are amazing. Been vacationing in NW WY for over 20 years. Recommend avoiding mosquito season though.
Charles, thanks for the extensive and impressive body of work involved in your report.
thumb.ai profile picture
@Charles Bolin Do you have an opinion on which of your cycle stages we will be in for 2022? Apologies if you said so and I missed it.
Charles Bolin profile picture
@thumbsoup That is a good question and I should have explained more clearly. The Business Cycle is 1) Recovery (Early), 2) Middle, 3) Late, and 4) Recession. Normalization is a subset of Middle and Late.

Fidelity estimates that we are in the Middle Stage. The Fed Tapering QE will probably be part of the Middle Stage. It is fairly unusual for inflation to be this high in the Middle Stage. When the Fed starts raising rates that will result in the economy slowing into the Late Stage.

To answer your question, we are in the Middle Stage of the business cycle, and my guess is that raising rates before the end of the year will put us in the Late Stage. It depends upon the severity and persistence of inflation.
thumb.ai profile picture
@Charles Bolin Thank you, and that makes sense.
Charles Bolin profile picture
I apologize for my late response, I have been traveling and getting my feet back on the ground after a long and much appreciated holiday season. I hope that everyone was able to enjoy the holidays as well. I will consolidate responses.
Hi Charles,any thoughts on how FMSDX will hold up in the next bear market?
Thanks for your work B/L
Charles Bolin profile picture
@Big Louie Hi. On a relative sense, FMSDX will perform about as well as a Mixed Asset Conservative or good Mixed Asset Moderate Fund. The advantage of FMSDX is that it has a higher yield than most of these funds.

FMSDX changes its asset allocation based market conditions. It could do better depending upon how well these conditions are telegraphed. COVID was a surprise which did not follow the typical business cycle.

Perhaps a more relevant question is how will do during the Fed's Normalization? I checked out how the older share class, FAYZX, did and the answer is the same about as well as conservative or moderate mixed asset funds.

The MFO Risk Category 3 (Moderate) is mostly convertible securities and preferred stock aside from mixed asset funds. I like FMSDX because it invests in these assets.

I placed an order to exchange FSMEX for FMSDX today, because the former is getting too volatile and FMSDX is more uncorrelated.
Another excellent article Charles! Great ideas for more research.
Lake OZ boater profile picture
Much appreciated and timely ! I am in the process of IRA rollovers to Fidelity, and have been overwhelmed by too fund choices. Thanks for helping me narrow them down.

As a pre-retiree, I am looking for a combination of income and conservative growth. Fidelity Multi-Asset Income Fund (FMSDX) was not on my radar screen, but thanks to your recommendation, it is now on my short list.

Thanks for sharing your work, and best wishes for continuing success in 2022!
navyair profile picture
@LakeOZ boater I can recommend you estimate your taxes in retirement, and also look at your RMD when you hit 72 if you have traditional IRA's.

I have a traditional pension and an investment portfolio. Approaching 65 it dawned on me that once I started taking SSec (wife at 66+4, me at 70), there would be almost no room in the tax bracket for additional dividend growth. We would be very close to bumping up a tax bracket and also a Medicare bracket.

So, we started drawing down the only traditional IRA we had left. I had hoped to have it near zero when my wife hit 72. That would create a little headroom for dividend growth and reinvesting the t-IRA into DGI stocks.

However, we got hit by the SECURE act earlier this year when she (unexpectedly) inherited her dad's t-IRA. He hadn't taken his RMD for this year, and it bumped us up a tax bracket and Medicare bracket. Despite doing extensive tax planning, we got hit anyway. (Not complaining, it is additional money, so a blessing).
Lake OZ boater profile picture
@navyair Thank you for sharing those insights. I have been thinking more about taxes , and this is very timely.

Congrats on your comfortable retirement, wishing you a successful 2022 in the markets.
navyair profile picture
@LakeOZ boater Thank you, sir. Hope your 2022 is a great year as well.

We are sharing the wealth with the next 2 generations, having started 529 plans for one grandchild and will do the same for the other 2 due this year...so 2022 is already shaping up to be a great year for us.
Bruce Roberts profile picture

Amy update on MFO Premium since the change of last year? Still considering signing up for it. Thanks.
Charles Bolin profile picture
@Bruce Roberts Yes, I am relieved to respond that MFO Premium will continue. Charles Boccadoro does a great job! I am also pleased that the MFO newsletter will be continuing in a new format.
while I agree with your assessment of FSMEX,I consider it be a core holding based upon its stellar past performance. Probably purchased to provide some diversification for the portfolios objectives.
Charles Bolin profile picture
@villanema FSMEX and FPHAX are both great funds with long term histories. As I near retirement, I am more interested in capital preservation than returns. FSMEX has been volatile of late and so I just traded it for the less volatile FMSDX. Many if not most sectors are highly valued and FSMEX has had a great run FMSDX tends to invest more in value which has been doing well of late.
good to see you take a stab at utilizing the new mfo reamer and ferguson metrics.
the continued success of mid-large cap blend\growth (mostly u.s.) means avoiding other great funds with too much overlap\correlation. much of that success has resulted in major distributions 2020-2021.
wphill profile picture
Awesome body of work. Do you plan on a second chapter in your career?
Great face value validity to all you post, well reasoned. Wonderful if assumptions had the support of prior research but that's the kind of support that's more than one person can do. One question for us retirees who are facing the first RMD. What's your strategy? My current plan is to wait unit december instead of cost averaging out over time. I will sell enough of my stable funds to pay taxes and add more cash for any capital expense; the balance will be moved as in kind equity positions into my taxable account. I'm fortunate enough that at this time we have enough income. As we age, that will change.
Charles Bolin profile picture
@wphill Yes, I plan on retiring in the near future and the next chapter in my life is to visit Yellowstone Park. I have never been there but family say it is great.

I am still a few years out from RMDs so you are ahead of me thinking through the withdrawal strategy.

My strategy is to take one pension as a lump sum and to defer social security until age 70. This keeps income low, and is an ideal time to do a Roth Conversion. In this manner, I reduce income and taxes when I reach 72. Of course, I plan to talk it over with a financial planner soon.
Wow, that's a lot to think about. I'll have to study this more closely, particularly now as I'm looking at some rebalancing. I have an IRA at Fidelity and a taxable account at Vanguard.
wphill profile picture
@glinsight Always something good here.
RettW profile picture
@glinsight Yes, it was so much to think about and so broad that it doesn’t seem specifically actionable, especially in the ETF space.
Maybe someone will publish a Black-Litterman piece, which would merge recent averages and variances with expected future returns and confidences. Then it would optimize/produce a specific proportion of certain funds, not all of them.
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