…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.

Lewis Carroll, Alice in Wonderland

This is my ninety-ninth 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 $3,000,000. This should be capable of producing an annual income from total portfolio returns of about $103,500 (in 2025 dollars).

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

A secondary focus will be maintaining the minimum equity target of $2,400,000.

Portfolio summary

Vanguard Lifestrategy High Growth Fund	$885,506
Vanguard Lifestrategy Growth Fund	$44,356
Vanguard Lifestrategy Balanced Fund	$79,704
Vanguard Diversified Bonds Fund	$91,944
Vanguard Australian Shares ETF (VAS)	$564,260
Vanguard International Shares ETF (VGS)	$775,332
Betashares Australia 200 ETF (A200)	$307,684
Telstra shares (TLS)	$2,259
Insurance Australia Group shares (IAG)	$9,774
NIB Holdings shares (NHF)	$8,226
Gold ETF (GOLD.ASX)	$221,810
Bitcoin	$1,448,642
Raiz app (Aggressive portfolio)	$25,265
Spaceship Voyager app (Index portfolio)	$4,321
BrickX (P2P rental real estate)	$4,440
Plenti Capital Note and Flex Market	$84,000
Total portfolio value	$4,558,523 (-$74,101)

Asset allocation

Australian shares	27.7%
Global shares	26.1%
Emerging market shares	1.1%
International small companies	1.3%
Total international shares	28.5%
Total shares	56.2% (-23.8%)
Total property securities	0.1% (+0.1%)
Australian bonds	3.4%
International bonds	3.6%
Total bonds	7.0% (+2.0%)
Gold	4.9%
Bitcoin	31.8%
Gold and alternatives	36.6% (+21.6%)

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

Comments

The portfolio encountered further significant falls this month, with overall losses of just above $74,000 or 1.6 per cent of the portfolios value.

The relative movement of portfolio components within this negative result is quite notable, however. International shares fell around 4.9 per cent, and the value of Australian shares held also fell by around 3.0 per cent.

With increased economic and geopolitical uncertainty, and fears of US tariffs on gold imports, gold continued to extend recent gains, increasing in value by around 8 per cent over the last month alone.

Bitcoin remained at around the same level, appreciating by a modest 0.8 per cent over the period. By contrast, bond holdings contracted by about 0.3 per cent.

The small appreciation in Bitcoin and larger gains in gold partially offset falls in equity holdings, playing the traditional role of diversification in this month at least. This is also reflected in the fact that the headline portfolio result is more positive than if only the traditional financial assets (ex Bitcoin) are considered.

This month the portfolio saw its first substantive new investments in over a year.

The falling equity markets brought the portfolio close to the target minimum holding for Australian equities of $1.2 million. As a result, I purchased additional Australian equities (using the ETF VAS), to increase the ‘buffer’ to this minimum value, and incrementally shift the overall equity portfolio closer to the desired 50/50 domestic and international allocation.

Continue reading “Monthly Portfolio Update – March 2025”

Gold is money. Everything else is credit.

J. P. Morgan

This is my ninety-eighth 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 $3,000,000. This should be capable of producing an annual income from total portfolio returns of about $103,500 (in 2025 dollars).

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

A secondary focus will be maintaining the minimum equity target of $2,400,000.

Portfolio summary

Vanguard Lifestrategy High Growth Fund	$912,391
Vanguard Lifestrategy Growth Fund	$46,447
Vanguard Lifestrategy Balanced Fund	$81,122
Vanguard Diversified Bonds Fund	$92,183
Vanguard Australian Shares ETF (VAS)	$547,767
Vanguard International Shares ETF (VGS)	$814,942
Betashares Australia 200 ETF (A200)	$317,233
Telstra shares (TLS)	$2,201
Insurance Australia Group shares (IAG)	$10,009
NIB Holdings shares (NHF)	$8,034
Gold ETF (GOLD.ASX)	$205,966
Secured physical gold	$32,412
Bitcoin	$1,437,541
Raiz app (Aggressive portfolio)	$26,147
Spaceship Voyager app (Index portfolio)	$4,495
BrickX (P2P rental real estate)	$4,686
Plenti Capital Note and Flex Market	$89,048
Total portfolio value	$4,632,624 (-$489,042)

Asset allocation

Australian shares	27.4%
Global shares	26.8%
Emerging market shares	1.1%
International small companies	1.4%
Total international shares	29.3%
Total shares	56.6% (-23.4%)
Total property securities	0.1% (+0.1%)
Australian bonds	3.5%
International bonds	3.6%
Total bonds	7.1% (+2.1%)
Gold	5.1%
Bitcoin	31.0%
Gold and alternatives	36.2% (+21.2%)

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

Comments

Over the course of this month the portfolio experienced losses of around $490,000, contracting by 9.5 per cent in headline terms.

This movement is the single largest monthly loss ever encountered on the journey. It comes, however, after a period of sustained growth, which expanded the portfolio over $1.2 million over the prior five months.

A major part of the movement this month is attributable to a decline in the price of Bitcoin, which fell approximately 23 per cent from the end of last month.

This is significant in absolute dollar terms, due to past growth the value of the holdings, but quite unremarkable in percentage terms in its record in the portfolio. As an example, monthly losses of the comparable or greater size occur have occurred five times in the past five years.

Equity markets also experienced hesitancy and some pullbacks amidst geopolitical uncertainty, continuing inflation concerns, and market valuations appearing high.

This resulted in falls of around 4 per cent in Australian equities, and slightly smaller losses – of 2.3 per -cent in the value of global equity holdings.

By contrast, and as will be discussed in detail below, gold prices continued to increase, leading to gains of around 2.5 per cent on gold assets.

Through the month, the bond portfolio grew slightly, appreciating 1 per cent.

Gold in the portfolio: All that glitters?

Gold has been part of the financial independence portfolio for around 16 years, since initial purchases of a gold ETF in May 2009, as financial markets staggered and began recovering from the Global Financial Crisis.

In the portfolio it plays the role of a diversified, non-correlated asset, as well as a hedge against disorderly markets, currency devaluations, and geopolitical risks.

The recent market performance of gold has somewhat belied its intended role as a niche, low profile, steady portfolio component with the potential to lightly moderate negative movements in an equity dominated portfolio (pdf).

According to the portfolio plan, no prospect of a real return on gold is assumed, a position informed by the unspectacular returns performance of gold compared to other assets over multi-decade periods.

The intended role of gold in my financial independence portfolio, together with Bitcoin, was briefly reviewed around five years ago here. When that was written, gold represented about 6.4 per cent of the portfolio. It current represents 5.1 per cent.

This update looks more closely at the record of gold in the portfolio, asking the question: what, if anything, does the performance of gold over the past few years say about its role?

Continue reading “Monthly Portfolio Update – February 2025”

The wind has risen; we must try to live

Paul Valery, The Graveyard by the Sea

This is my ninety-seventh 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 $3,000,000. This should be capable of producing an annual income from total portfolio returns of about $103,500 (in 2025 dollars).

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

A secondary focus will be maintaining the minimum equity target of $2,400,000.

Portfolio summary

Vanguard Lifestrategy High Growth Fund	$930,271
Vanguard Lifestrategy Growth Fund	$47,055
Vanguard Lifestrategy Balanced Fund	$81,639
Vanguard Diversified Bonds Fund	$91,293
Vanguard Australian Shares ETF (VAS)	$570,410
Vanguard International Shares ETF (VGS)	$834,689
Betashares Australia 200 ETF (A200)	$330,508
Telstra shares (TLS)	$2,110
Insurance Australia Group shares (IAG)	$11,656
NIB Holdings shares (NHF)	$6,948
Gold ETF (GOLD.ASX)	$201,058
Secured physical gold	$31,595
Bitcoin	$1,857,719
Raiz app (Aggressive portfolio)	$26,452
Spaceship Voyager app (Index portfolio)	$4,540
BrickX (P2P rental real estate)	$4,684
Plenti Capital Note and Flex Market	$89,039
Total portfolio value	$5,121,666 (+$300,142)

Asset allocation

Australian shares	25.6%
Global shares	24.8%
Emerging market shares	1.0%
International small companies	1.2%
Total international shares	27.0%
Total shares	52.6% (-27.4%)
Total property securities	0.1% (+0.1%)
Australian bonds	3.2%
International bonds	3.3%
Total bonds	6.4% (+1.4%)
Gold	4.5%
Bitcoin	36.3%
Gold and alternatives	40.8% (+25.8%)

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

Comments

This month the portfolio saw strong growth – of $300,000 – or 6.2 per cent.

This is the third largest monthly increase ever registered across the journey. The last 12 months has been the most significant period of expansion in the portfolio ever experienced.

The growth was substantially due to further increases in the value of Bitcoin holdings, which increased around 12 per cent across the month, combined with further gains in equities.

This has pushed the headline portfolio above $5.0 million for the first time in the journey.

At a headline level, the portfolio has therefore doubled since the end of 2022, again, largely due to the impact of Bitcoin. Looking just to the traditional financial portfolio, this has expanded by around 50 per cent over the same period, despite an absence of regular new investments across the last year.

Australian equity holdings provided gains of about 3.5 per cent in price terms, with distributions adding another 1.3 per cent to this. International shares also produced capital appreciation of 3.2 per cent, for a total monthly return of 3.7 per cent when distributions are accounted for.

Bond holdings produced a small capital gain of 0.2 per cent.

Gold continued its strong performance with an increase of just over 7 per cent for the month. Interestingly, this means that with the recent gold price increases, gold holdings are quite close to their target level of holdings. The value of gold holdings has doubled in nominal terms since mid-2019.

Continue reading “Monthly Portfolio Update  – January 2025”