Remember that you are an actor in a drama, whatever kind the playwright desires
Epictetus, Encheiridion XVII
This is my fifty-ninth monthly portfolio update. I complete this regular update to check progress against my goal.
Portfolio goal
My objective is to reach a portfolio of $2,585,000 by 31 July 2022. This would produce a real annual income of about $90,500 (in 2021 dollars).
This portfolio objective is based on an assumed safe withdrawal rate of 3.5 per cent.
Portfolio summary
| Vanguard Lifestrategy High Growth Fund | $820,102 |
| Vanguard Lifestrategy Growth Fund | $43,914 |
| Vanguard Lifestrategy Balanced Fund | $79,229 |
| Vanguard Diversified Bonds Fund | $98,895 |
| Vanguard Australian Shares ETF (VAS) | $365,976 |
| Vanguard International Shares ETF (VGS) | $248,767 |
| Betashares Australia 200 ETF (A200) | $287,934 |
| Telstra shares (TLS) | $2,036 |
| Insurance Australia Group shares (IAG) | $6,081 |
| NIB Holdings shares (NHF) | $7,944 |
| Gold ETF (GOLD.ASX) | $107,668 |
| Secured physical gold | $17,186 |
| Plenti (P2P lending) | $809 |
| Bitcoin | $905,100 |
| Raiz app (Aggressive portfolio) | $20,771 |
| Spaceship Voyager app (Index portfolio) | $3,461 |
| BrickX (P2P rental real estate) | $4,982 |
| Total portfolio value | $3,020,855 (+$260,052) |
Asset allocation
| Australian shares | 33.5% |
| Global shares | 21.0% |
| Emerging market shares | 1.5% |
| International small companies | 1.9% |
| Total international shares | 24.4% |
| Total shares | 57.9% (-17.1%) |
| Total property securities | 0.2% (+0.2%) |
| Australian bonds | 2.4% |
| International bonds | 5.4% |
| Total bonds | 7.8% (-7.2%) |
| Gold | 4.1% |
| Bitcoin | 30.0% |
| Gold and alternatives | 34.1% (+24.1%) |
Presented visually, the chart below is a high-level view of the current asset allocation of the portfolio.
Comments
This month the financial independence portfolio rose in value by $260,000, growing around 9.4 per cent in a single month.
As a consequence the portfolio has just unexpectedly crossed the threshold of $3.0 million, less than a year after the portfolio passed $2.0 million in value.
The monthly movement across October was the largest ever change in the value of the portfolio in dollar terms, and the third largest increase in percentage terms since this record began in 2017.
Unusually, over the month the capital value of all major traditional financial asset classes – equities, bonds, and gold – fell quite uniformly. Each declined by between 1.0 to 1.5 per cent.
In the case of Australia equities, payments from September quarter dividends meant that a small positive total return of around 0.5 per cent was achieved. This helped portfolio equity holdings reach their highest ever value this month, of about $1.75 million.
The poor recent performance of fixed interest bonds extended this month. The total value of Vanguard Diversified Bond fund holdings, for example, have declined around 10 per cent this year – noting that this also includes paid out distributions.
The unmistakeable forward motivating force for the portfolio was Bitcoin, which increased in value by 35 per cent through the month. This contributed over 90 per cent of the overall positive movement of the portfolio – or around $235,000.
Continue reading “Monthly Portfolio Update – October 2021”