The sea washes across the decks and maststep
And dark daylight already shows through long rents in the sails
Alcaeus, Fragments
This is my sixty-second 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 $2,620,000 through 2022. This should be capable of producing an annual income from total portfolio returns of about $91,600 (in 2022 dollars).
This portfolio objective is based on an assumed safe withdrawal rate of 3.5 per cent.
A secondary focus through 2022 will be achieving the minimum equity target of $2,100,000.
Portfolio summary
| Vanguard Lifestrategy High Growth Fund | $790,086 |
| Vanguard Lifestrategy Growth Fund | $42,487 |
| Vanguard Lifestrategy Balanced Fund | $76,957 |
| Vanguard Diversified Bonds Fund | $97,297 |
| Vanguard Australian Shares ETF (VAS) | $367,311 |
| Vanguard International Shares ETF (VGS) | $288,466 |
| Betashares Australia 200 ETF (A200) | $274,868 |
| Telstra shares (TLS) | $2,089 |
| Insurance Australia Group shares (IAG) | $5,372 |
| NIB Holdings shares (NHF) | $7,476 |
| Gold ETF (GOLD.ASX) | $115,439 |
| Secured physical gold | $18,425 |
| Plenti (P2P lending) | $56 |
| Bitcoin | $586,560 |
| Raiz app (Aggressive portfolio) | $20,463 |
| Spaceship Voyager app (Index portfolio) | $3,459 |
| BrickX (P2P rental real estate) | $4,997 |
| Total portfolio value | $2,701,808 (-$246,827) |
Asset allocation
| Australian shares | 36.6% |
| Global shares | 24.4% |
| Emerging market shares | 1.6% |
| International small companies | 2.0% |
| Total international shares | 28.1% |
| Total shares | 64.6% (-15.4%) |
| Total property securities | 0.2% (+0.2%) |
| Australian bonds | 2.6% |
| International bonds | 5.9% |
| Total bonds | 8.5% (+3.5%) |
| Gold | 5.0% |
| Bitcoin | 21.7% |
| Gold and alternatives | 26.7% (+11.7%) |
Presented visually, the chart below is a high-level view of the current asset allocation of the portfolio.
Comments
Over the past month the portfolio has witnessed its largest ever nominal dollar loss, of around $247,000.
This represents a decline of 8.4 per cent in the portfolio, which is the second largest percentage fall after March 2020. It has pushed the portfolio down to levels of around six months ago, notionally at least undoing all progress since winter.
Despite this, the portfolio still – narrowly – sits above the revised portfolio goal of $2.62 million
The story of the month was of simultaneous waves from west and east, to borrow another phrase from the Greek poet Alcaeus. Sharp falls in equity markets through January and continued falls in the value of bitcoin for most of the month contributed in nearly equal parts to the final result.
Australian shares fell around 5.5 per cent for the month. Global equity holdings also declined in value by around 4.5 per cent.
Increasing market conviction around future US interest rate rises also saw the value of bond holdings simultaneously fall, with relatively large losses incurred – of about 1.9 per cent.
The only bright spot in the portfolio was gold holdings, which increased in value by nearly 1.6 per cent to reach levels not experienced since November 2020.
Broadly, however, what can be seen in the chart below is what occurs when multiple asset classes exhibit at least short-term correlation, each responding to perceptions of sharply changed market conditions.
Continue reading “Monthly Portfolio Update – January 2022”
![[Chart - Figure 1 - Trends in Taxable Investment Income]](https://i0.wp.com/www.thefiexplorer.com/wp-content/uploads/2021/10/TaxOctFig1.png?resize=736%2C383&ssl=1)
