There is a pleasure in the pathless woods,
Lord Byron, Childe Harold’s Pilgramage
There is a rapture on the lonely shore,
There is society, where none intrudes,
By the deep sea, and music in its roar
This is my eighty-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 $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 | $855,620 |
| Vanguard Lifestrategy Growth Fund | $43,993 |
| Vanguard Lifestrategy Balanced Fund | $77,856 |
| Vanguard Diversified Bonds Fund | $89,742 |
| Vanguard Australian Shares ETF (VAS) | $525,433 |
| Vanguard International Shares ETF (VGS) | $723,482 |
| Betashares Australia 200 ETF (A200) | $309,151 |
| Telstra shares (TLS) | $2,057 |
| Insurance Australia Group shares (IAG) | $8,108 |
| NIB Holdings shares (NHF) | $9,432 |
| Gold ETF (GOLD.ASX) | $150,757 |
| Secured physical gold | $23,865 |
| Bitcoin | $1,193,341 |
| Raiz app (Aggressive portfolio) | $23,150 |
| Spaceship Voyager app (Index portfolio) | $3,996 |
| BrickX (P2P rental real estate) | $4,545 |
| Plenti Capital Notes Market Loan | $5,000 |
| Total portfolio value | $4,049,528 (+$218,949) |
Asset allocation
| Australian shares | 29.9% |
| Global shares | 27.8% |
| Emerging market shares | 1.2% |
| International small companies | 1.5% |
| Total international shares | 30.4% |
| Total shares | 60.3% (-19.7%) |
| Total property securities | 0.1% (+0.1%) |
| Australian bonds | 1.8% |
| International bonds | 3.9% |
| Total bonds | 5.8% (+0.8%) |
| Gold | 4.3% |
| Bitcoin | 29.5% |
| Gold and alternatives | 33.8% (+18.8%) |
Presented visually, the pie chart below is a high-level view of the current asset allocation of the portfolio.
Comments
This month has seen a continuation of a six month period of expansion in the financial indepedence portfolio. Over the past month, the portfolio increased in value by $219,000, growing 5.7 per cent.
This has taken the portfolio to over $4.0 million for the first time in the journey.
Over the past six months, the portfolio has grown by over 40 per cent in value. A substantial part of that has been through increases in the price of Bitcoin, with the remainder being attributable to equity market performance.
Quite simply, there has never been a period of such strong portfolio growth. The portfolio is now approximately four times the size than when this record started in early 2017. The equity market component alone has doubled in the last four years.
Once again this month and consistent with the past few months, the growth in the portfolio was predominantly attributable to continued advances in the value of Bitcoin holdings, of around 14 per cent.
There was also a strong continued momentum in equity prices, with a growth in both international and Australian equities of around 3.4 per cent contributing around $75,000 to the monthly outcome. All else being equal, this can be expected to decline slightly in coming days to account for distributions being paid out.
Gold holdings also increased substantially in value this month, by around 7.7 per cent.
Over the past three years the gold holdings have gained around 50 per cent in nominal terms.
This means that even as the portfolio has grown, the overall allocation to gold has remained level over this timeframe. Gold appears to be being supported by continuing central bank purchasing activity, and easing expectations around interest rates.
The collective net result of all of these movements is to leave the traditional financial portfolio (that is, excluding Bitcoin) only around $14,000 short of the formal portfolio target of $2.87 million.
In other words, the portfolio target has been effectively met, at least within the range of quite normal daily equity market volatility, even if no value at all is ever recovered from Bitcoin holdings.
Continue reading “Monthly Portfolio Report – March 2024”