2021 annual total returns
| ticker | type | 2021 Close |
|---|---|---|
| BTC | bitcoin | +58% |
| SPY | large caps | +29% |
| QQQ | tech | +27% |
| IWM | small caps | +15% |
| EFA | foreign (developed) | +11% |
| CPI | inflation | +7% |
| JNK | junk bonds | +4% |
| USD | cash | +0% |
| BND | bonds | -2% |
| GLD | gold | -4% |
| EEM | foreign (emerging) | -4% |
Like the Red Queen says, "here we must run as fast as we can, just to stay in place. And if you wish to go anywhere you must run twice as fast as that.” Keeping up with the near 7% inflation for 2021 required taking higher risks in either stocks or crypto. For example, a 50/50 world stock (VT, not shown but +18%) and US bond portfolio would have returned an average of 8%, eking out just over a +1% gain compared to inflation, although no doubt a loss on an after-tax basis. A 50/50 SPY and US bond portfolio would have made 12-13%, a 5% gain over inflation and enough that even after taxes you’d be ahead by a bit.
Another great year for the crypto hodlers, with big gains again. On the individual stock front, 2021 was exceptional in the volatility around Gamestop and AMC associated with social media fueled collective buying sprees that dismayed short sellers and brought riches by way of triple digit returns to the Apes who managed to get in early, sell at a good time, or both. GME was up over 800%.
Coming off the rebound from the covid crash in many of my holdings, at least though the start of the year, I ended up doing quite well. A little leverage works a lot better in an up market than a down one like 2020, that’s for sure.