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 shares | 31.2% |
| Global shares | 27.8% |
| Emerging market shares | 1.2% |
| International small companies | 1.5% |
| Total international shares | 30.5% |
| Total shares | 61.7.% (-18.3%) |
| Total property securities | 0.1% (+0.1%) |
| Australian bonds | 3.9% |
| International bonds | 4.0% |
| Total bonds | 8.0% (+3.0%) |
| Gold | 4.9% |
| Bitcoin | 25.4% |
| Gold and alternatives | 30.2% (+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”