Monthly Portfolio Report – September 2024

Even victors are by victories undone.

John Dryden

This is my ninety-fourth monthly portfolio update. I complete this regular update to check progress against my goal.

Portfolio goal

My objective is to maintain a portfolio of at least $2,870,000. This should be capable of producing an annual income from total portfolio returns of about $99,000 (in 2024 dollars).

This portfolio objective is based on an assumed safe withdrawal rate of 3.45 per cent.

A secondary focus will be achieving the minimum equity target of $2,300,000.

Portfolio summary

Vanguard Lifestrategy High Growth Fund$878,763
Vanguard Lifestrategy Growth Fund$45,157
Vanguard Lifestrategy Balanced Fund$79,693
Vanguard Diversified Bonds Fund$92,573
Vanguard Australian Shares ETF (VAS)$561,092
Vanguard International Shares ETF (VGS)$724,348
Betashares Australia 200 ETF (A200)$324,802
Telstra shares (TLS)$2,062
Insurance Australia Group shares (IAG)$9,325
NIB Holdings shares (NHF)$7,152
Gold ETF (GOLD.ASX)$171,898
Secured physical gold$27,029
Bitcoin$1,034,796
Raiz app (Aggressive portfolio)$24,876
Spaceship Voyager app (Index portfolio)$4,044
BrickX (P2P rental real estate)$4,706
Plenti Capital Notes Market Loan$89,000
Total portfolio value$4,081,316
(+$162,627)

Asset allocation

Australian shares31.2%
Global shares27.8%
Emerging market shares1.2%
International small companies1.5%
Total international shares30.5%
Total shares61.7.% (-18.3%)
Total property securities0.1% (+0.1%)
Australian bonds3.9%
International bonds4.0%
Total bonds8.0% (+3.0%)
Gold4.9%
Bitcoin25.4%
Gold and alternatives30.2% (+14.7%)

Presented visually, the pie chart below is a high-level view of the current asset allocation of the portfolio.

Comments

This month the portfolio has expanded to its highest ever level, growing to $4.08 million through an increase in value of around $162,000.

Most of this increase was an expansion in the value of traditional financial holdings, while the remainder resulted from a growth in the value of Bitcoin.

This means both the overall portfolio, and even the more narrowly defined ‘financial portfolio’ which excludes Bitcoin, remain well above the portfolio goal.

Australian equities grew by 3.0 per cent over the month, while global equities increased in value by around 0.3 per cent. Bonds also continued to recover, appreciating around 0.9 per cent over the last month.

Gold holdings performed more strongly than equities or bonds over the month, continuing an extremely strong performance of recent years. This is somewhat surprising, belying its intended role as a low variance stabilising element of the portfolio.

Gold has been the best performing financial component of the portfolio in the last year, the last two years, and has also outperformed the equity ETFs I have purchased since 2017. Over the past five years, only the international equities element of the financial portfolio has narrowly outperformed the gold holdings (16.4 per cent versus 14 per cent).

A likely factor in this change has been the increased purchasing of gold as a central bank reserve asset, and a relative decline in the willingness of a range of countries to hold US Treasuries since the sanctioning of Russian central bank US Treasury reserves in recent years.

Another significant contributor is the continued growth in the money supply, which has averaged about 5-10 per cent since 2009.

This month some excess cash was invested in Plenti Capital Notes, noting that this is a higher risk product with the return of invested capital at some appreciable risk. The regular income from this investment is being added to a contingent cash reserve, outside of the listed portfolio.

Continue reading “Monthly Portfolio Report – September 2024”

Monthly Portfolio Report – August 2024

To think is easy. To act is hard. But the hardest thing in the world is to act in accordance with your thinking.

Goethe

This is my ninety-third monthly portfolio update. I complete this regular update to check progress against my goal.

Portfolio goal

My objective is to maintain a portfolio of at least $2,870,000. This should be capable of producing an annual income from total portfolio returns of about $99,000 (in 2024 dollars).

This portfolio objective is based on an assumed safe withdrawal rate of 3.45 per cent.

A secondary focus will be achieving the minimum equity target of $2,300,000.

Portfolio summary

Vanguard Lifestrategy High Growth Fund$861,536
Vanguard Lifestrategy Growth Fund$44,380
Vanguard Lifestrategy Balanced Fund$78,502
Vanguard Diversified Bonds Fund$91,760
Vanguard Australian Shares ETF (VAS)$544,300
Vanguard International Shares ETF (VGS)$722,096
Betashares Australia 200 ETF (A200)$315,649
Telstra shares (TLS)$2,094
Insurance Australia Group shares (IAG)$9,565
NIB Holdings shares (NHF)$7,512
Gold ETF (GOLD.ASX)$165,774
Secured physical gold$26,132
Bitcoin$973,512
Raiz app (Aggressive portfolio)$24,201
Spaceship Voyager app (Index portfolio)$3,980
BrickX (P2P rental real estate)$4,704
Plenti Capital Notes Market Loan$43,000
Total portfolio value$3,918,689
(-$157,604)

Asset allocation

Australian shares31.6%
Global shares28.7%
Emerging market shares1.2%
International small companies1.5%
Total international shares31.5%
Total shares63.1.% (-16.9%)
Total property securities0.1% (+0.1%)
Australian bonds2.9%
International bonds4.1%
Total bonds7.0% (+2.0%)
Gold4.9%
Bitcoin24.8%
Gold and alternatives29.7% (+14.7%)

Presented visually, the pie chart below is a high-level view of the current asset allocation of the portfolio.

Comments

This month the portfolio underwent significant losses at the headline level, with a loss of around 3.0 per cent, or $158,000.

This was largely a function of a fall in the value of Bitcoin holdings.

This has left the overall portfolio of traditional financial assets virtually unchanged on a monthly basis, and still comfortably above the portfolio goal.

Equities performance across the month were mixed, with a capital growth of 2.2 per cent for Australian holdings, and a small loss of around 0.4 per cent for international equities.

Gold appreciated around 1.4 per cent over the same period while Bitcoin holdings, as mentioned, declined around 14 per cent.

The bond holdings of the portfolio continued to recover as global rates eased, reaching their highest absolute value in more than two years.

This month no new investments were made, with the regular income produced by the Plenti Capital Notes being added to a contingent cash reserve.

Continue reading “Monthly Portfolio Report – August 2024”

Monthly Portfolio Report – July 2024

The house of delusions is cheap to build but drafty to live in.

A. E. Housman

This is my ninety-second monthly portfolio update. I complete this regular update to check progress against my goal.

Portfolio goal

My objective is to maintain a portfolio of at least $2,870,000. This should be capable of producing an annual income from total portfolio returns of about $99,000 (in 2024 dollars).

This portfolio objective is based on an assumed safe withdrawal rate of 3.45 per cent.

A secondary focus will be achieving the minimum equity target of $2,300,000.

Portfolio summary

Vanguard Lifestrategy High Growth Fund$855,315
Vanguard Lifestrategy Growth Fund$43,951
Vanguard Lifestrategy Balanced Fund$77,576
Vanguard Diversified Bonds Fund$90,252
Vanguard Australian Shares ETF (VAS)$542,025
Vanguard International Shares ETF (VGS)$735,030
Betashares Australia 200 ETF (A200)$314,298
Telstra shares (TLS)$2,100
Insurance Australia Group shares (IAG)$9,375
NIB Holdings shares (NHF)$9,036
Gold ETF (GOLD.ASX)$167,038
Secured physical gold$26,286
Bitcoin$1,127,990
Raiz app (Aggressive portfolio)$24,310
Spaceship Voyager app (Index portfolio)$3,980
BrickX (P2P rental real estate)$4,731
Plenti Capital Notes Market Loan$43,000
Total portfolio value$4,076,293
(+$177,439)

Asset allocation

Australian shares30.3%
Global shares27.9%
Emerging market shares1.1%
International small companies1.4%
Total international shares30.5%
Total shares60.8.% (-19.2%)
Total property securities0.1% (+0.1%)
Australian bonds2.8%
International bonds3.9%
Total bonds6.7% (+1.7%)
Gold4.7%
Bitcoin27.7%
Gold and alternatives32.4% (+17.4%)

Presented visually, the pie chart below is a high-level view of the current asset allocation of the portfolio.

Comments

The portfolio reached the highest level in its history this month, with a growth of 4.6 per cent, or around $177,000.

This has been achieved in significant part by an increase in the value of Bitcoin holding, with holdings in equity making up the rest of the movement through the period.

Even ascribing no value at all to the entirety of the Bitcoin holdings, the financial portfolio still remains about the portfolio target.

The monthly movement of various asset classes outside of the Bitcoin holdings were not particularly significant, with increases of 4 per cent in Australian equities and slightly larger increases in the value of gold holdings (around 6 per cent).

An interesting feature to note is that quite frequently, directionally, the subcomponents of the entire portfolio has tended to move in a correlated manner, with this month, for example, bonds, equities and gold all advancing – even if with different strengths.

This month, the same as last, I invested some surplus funds that would in the past have been invested in equity index funds, into a further purchase of Plenti Capital Notes, at an approximate yield of 9.0 per cent.

As previously highlighted, yields of this kind are not available without a material risk to the safe return of the capital. At this stage and in my personal circumstances, however, this is a useful relatively short-term vehicle for funds I am happy to put at some risk, and which I have no need to access. Importantly, it represents only around 1 per cent of portfolio holdings.

Continue reading “Monthly Portfolio Report – July 2024”

Portfolio Income Update – Half Year to June 30, 2024

Adopt the pace of nature. Her secret is patience.

Ralph Waldo Emerson

Twice a year I prepare a summary of total income from my financial independence portfolio. This is my sixteenth portfolio income update since starting this record. As part of the transparency and accountability of this journey, I regularly report this income.

My primary goal is to maintain a portfolio of at least $2,870,000. This should be capable of providing a passive income of around $99,000 (in 2024 dollars).

A secondary focus is maintaining a minimum equity target of $2,300,000.

Portfolio income summary

InvestmentAmount
Vanguard Lifestrategy High Growth (retail fund)$20,096
Vanguard Lifestrategy Growth (retail fund)$907
Vanguard Lifestrategy Balanced (retail fund)$1544
Vanguard Diversified Bonds (retail fund)$199
Vanguard Australian Shares ETF (VAS)$8,149
Vanguard International Shares ETF (VGS)$18,386
Betashares Australia 200 ETF (A200)$4,622
Telstra shares (TLS.ASX)$48
Insurance Australia Group shares (IAG.ASX)$127
NIB Holding shares (NHF.ASX)$180
Raiz app (Aggressive portfolio)$316
Spaceship Voyager app (Index portfolio)$0
BrickX (P2P rental real estate)$16
Total Portfolio Income – Half-Year to June 30, 2023$54,993

The chart below sets out the income or distributions received on a half-yearly basis from the financial independence portfolio over the past eight years.

Continue reading “Portfolio Income Update – Half Year to June 30, 2024”