I keep a diary in order to enter the wonderful secrets of my life. If I didn’t write them down, I should probably forget all about them.

Oscar Wilde, The Importance of Being Earnest

This is my first portfolio update. I aim to update this monthly to check my progress against my aims.

Portfolio goal

My current portfolio objective is to reach a portfolio of $1 476 000 by 1 July 2021. My plan is that this should produce a real income of about $58 000. This is based on a real return of 3.92%, or a nominal return of 7.17%.

Those return estimates are the result of a probably unhealthy amount of detailed research about average returns of different asset classes, especially equites and bonds. As this was a quite involved process, I will post on it separately. I’m encouraged, though, that it seems to roughly equate to the widely used ‘4% rule’.

Portfolio summary

• Vanguard Lifestrategy High Growth – $579 423
• Vanguard Lifestrategy Growth  – $42 393
• Vanguard Lifestrategy Balanced – $75 740
• Vanguard Diversified Bonds – $111 009
• St Andrews ‘Top 200’ Australian shares (indexed) – $11 929
• Telstra shares – $6 798
• Insurance Australia Group shares – $14 963
• NIB Holdings – $5 700
• Gold ETF (GOLD.ASX)  – $74 008
• Secured physical gold – $1 809
• Ratesetter (P2P lending) – $33 782
• Bitcoin – $12 946
• Acorns app (Aggressive portfolio) – $3 735
• BrickX (P2P rental real estate) – $2 066

Total value: $976 311

Asset allocation

I track my asset allocation twice through each year, rather than monthly, but here is where that stood at the end of December.

• Australian shares – 31%
• International shares – 21%
• Emerging markets shares – 3%
• International small companies – 3%
• Total shares – 58%
• Australian property securities – 4%
• International property securities 3%
• Total property – 7%
• Australian bonds – 12%
• International bonds – 12%
• Total bonds – 24%
• Cash – 1.8%
• Gold and alternatives – 9.1%

Comments

The core of the portfolio are low-cost Vanguard index funds, and aside from some smaller shareholding picked up over time, the portfolio contains no actively managed products.

When I look at the portfolio above, dear reader, my reaction is “so much to explain”. Behind every holding there is a story and logic, at least there was at the time of initial investment! I’m very conscious that it is not the simplest portfolio possible in the circumstances. It mainly reflects three things – the time at which I discovered certain products, my previous explorations, and also a continuing curiosity about trying a few different products once my core indexed portfolio was fairly well established.

My goal is to simplify some of these holdings over time, and to continue, at the edges, to try and take advantage of and try some of the really interesting new fintech products as they are launched.

Progress

Progress to goal: 66.1%

Summary

First portfolio update done! I hope to introduce a few more charts and progress bars over time, as I get more of a handle on the tools and what’s possible. It feels good to be ‘two-thirds’ of the way to my goal. I’m looking forward to explaining my portfolio elements in a bit more detail in future posts.