Monthly Portfolio Update – May 2022

Make a spot in the middle of your mind where you can lie hidden, rejoice, and relax with no one interrupting you.

Petrarch

This is my sixty-sixth 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$763,710
Vanguard Lifestrategy Growth Fund$40,760
Vanguard Lifestrategy Balanced Fund$73,303
Vanguard Diversified Bonds Fund$90,568
Vanguard Australian Shares ETF (VAS)$378,234
Vanguard International Shares ETF (VGS)$320,331
Betashares Australia 200 ETF (A200)$287,538
Telstra shares (TLS)$2,068
Insurance Australia Group shares (IAG)$5,536
NIB Holdings shares (NHF)$8,868
Gold ETF (GOLD.ASX)$116,688
Secured physical gold$18,607
Plenti (P2P lending)$23
Bitcoin$487,750
Raiz app (Aggressive portfolio)$20,142
Spaceship Voyager app (Index portfolio)$3,196
BrickX (P2P rental real estate)$4,715
Total portfolio value$2,622,037
(-$158,939)

Asset allocation

Australian shares38.2%
Global shares25.9%
Emerging market shares1.6%
International small companies2.0%
Total international shares29.5%
Total shares67.7% (-12.3%)
Total property securities0.2% (+0.2%)
Australian bonds2.5%
International bonds5.8%
Total bonds8.3% (+3.3%)
Gold5.2%
Bitcoin18.6%
Gold and alternatives23.8% (+8.8%)

Presented visually, the chart below is a high-level view of the current asset allocation of the portfolio.

Chart - Asset Allocation

Comments

This month is a story in two parts – with declines across both the traditional financial portfolio, and in the value of Bitcoin holdings.

Combined, these led to an overall loss of about $159,000 or around 5.7 per cent of the total portfolio value.

The portfolio has narrowly stayed above the revised portfolio goal of $2.62 million at the end of the month, but through the month dipped below it for the first time in nearly a year.

Monthy portfolio value - graph

More than three-quarters of the absolute decline in portfolio value was caused by a fall of around 20 per cent in the price of Bitcoin over the month.

These falls occurred as inflation outcomes continued to illustrate the potential need for monetary policy tightening to the market, and the price of Bitcoin was also likely impacted by the failure of the Terra Luna algorithmic stablecoin.

The remainder of the portfolio loss was largely attributable to simultaneous declines in Australian and global share indexes. These each fell between 2 to 2.5 per cent.

Completing the overall negative pattern were falls in gold (of 3.3 per cent) and continued further declines in the value of bonds or fixed interest (0.2 per cent).

Continue reading “Monthly Portfolio Update – May 2022”

Monthly Portfolio Update – April 2022

The shouting, wounds, and blood were in plain view, the cause was hidden: fortune ruled the rest

Tacitus, Annals, Bk.I

This is my sixty-fifth 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$780,458
Vanguard Lifestrategy Growth Fund$41,461
Vanguard Lifestrategy Balanced Fund$74,230
Vanguard Diversified Bonds Fund$90,708
Vanguard Australian Shares ETF (VAS)$389,075
Vanguard International Shares ETF (VGS)$315,367
Betashares Australia 200 ETF (A200)$295,734
Telstra shares (TLS)$2,153
Insurance Australia Group shares (IAG)$5,752
NIB Holdings shares (NHF)$8,496
Gold ETF (GOLD.ASX)$120,610
Secured physical gold$19,357
Plenti (P2P lending)$23
Bitcoin$609,240
Raiz app (Aggressive portfolio)$20,349
Spaceship Voyager app (Index portfolio)$3,252
BrickX (P2P rental real estate)$4,711
Total portfolio value$2,780,976
(-$115,727)

Asset allocation

Australian shares37.0%
Global shares24.5%
Emerging market shares1.5%
International small companies1.9%
Total international shares28.0%
Total shares65.0% (-15.0%)
Total property securities0.2% (+0.2%)
Australian bonds2.4%
International bonds5.5%
Total bonds7.9% (+2.9%)
Gold5.0%
Bitcoin21.9%
Gold and alternatives26.9% (+11.9%)

Presented visually, the chart below is a high-level view of the current asset allocation of the portfolio.

Chart - Asset Allocation

Comments

This month twin winds hit the portfolio, leading to an overall loss of $115,000, or 4 per cent.

As a result, over half of the gains of the previous month were erased.

The portfolio is currently within sight, though a bit above, its total value twelve months ago. The past year has been a relatively volatile period in absolute terms, reinforced by the growth in the overall size of the portfolio, and its exposure to Bitcoin.

The value of the portfolio continues to be above the revised portfolio goal of $2.62 million, as it has since late July last year.

Monthy portfolio value - graph

This month Bitcoin declined significantly, falling around 13 per cent, representing the largest part of the overall decline. By contrast, gold enjoyed a positive capital return of around 4 per cent over the month.

International share holdings also fell by 2.8 per cent amidst strong signs of monetary tightenings to come in developed economies. Australian shares produced a negative return of around 0.5 per cent, once distributions were accounted for.

Continuing the negative picture, bond holdings fell by 2.6 per cent. This means in dollar terms the bond portfolio holdings are at their lowest value since late 2015, and are also close to their lowest level ever as a proportion of the portfolio.

Continue reading “Monthly Portfolio Update – April 2022”

Monthly Portfolio Update – March 2022

Time forks perpetually towards innumerable futures

Jorge Luis Borges, The Garden of Forking Paths

This is my sixty-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 $2,620,000 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$801,655
Vanguard Lifestrategy Growth Fund$42,562
Vanguard Lifestrategy Balanced Fund$76,143
Vanguard Diversified Bonds Fund$93,082
Vanguard Australian Shares ETF (VAS)$400,699
Vanguard International Shares ETF (VGS)$305,098
Betashares Australia 200 ETF (A200)$300,813
Telstra shares (TLS)$2,110
Insurance Australia Group shares (IAG)$5,549
NIB Holdings shares (NHF)$7,632
Gold ETF (GOLD.ASX)$116,270
Secured physical gold$18,552
Plenti (P2P lending)$28
Bitcoin$697,880
Raiz app (Aggressive portfolio)$20,594
Spaceship Voyager app (Index portfolio)$3,329
BrickX (P2P rental real estate)$4,707
Total portfolio value$2,896,703
(+$190,975)

Asset allocation

Australian shares36.3%
Global shares23.5%
Emerging market shares1.5%
International small companies1.9%
Total international shares26.9%
Total shares63.3% (-16.7%)
Total property securities0.2% (+0.2%)
Australian bonds2.4%
International bonds5.4%
Total bonds7.8% (+2.8%)
Gold4.7%
Bitcoin24.1%
Gold and alternatives28.7% (+13.7%)

Presented visually, the chart below is a high-level view of the current asset allocation of the portfolio.

Chart - Asset Allocation

Comments

This month the portfolio has increased by around $191,000, or around 7.1 per cent, which is the strongest performance in the past five months. This breaks the run of two relatively flat monthly outcomes since the beginning of the year.

Stepping back, this growth means that the portfolio now sits at approximately double the level reached three years ago, even though it has only just recovered to the level reach at the end of last August.

The portfolio continues to be above the revised portfolio goal of $2.62 million.

Monthy portfolio value - graph

A major reversal in the price of Bitcoin occurred over the past month, with its value rising around 19 per cent. This has delivered over half of the total portfolio gains made since last month.

The other significant source of growth was a 7.0 per cent advance in the value of Australian shares. Despite a poor start to the month, international equity investments gained around 2.2 per cent. This brought the value of total equity holdings to above $1.8 million, returning equities overall to close to their highest ever level.

By contrast, the value of gold assets held fell by 3.5 per cent, and bond holdings also suffered significant capital losses – of 2.5 per cent – as yields rise. This continues to leave the overall bond portfolio at the lowest levels last experienced in 2016.

Continue reading “Monthly Portfolio Update – March 2022”

Monthly Portfolio Update – February 2022

The air is cut away before

And closes from behind

Coleridge, The Rime of the Ancient Mariner, 424-425

This is my sixty-third 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$779,608
Vanguard Lifestrategy Growth Fund$41,861
Vanguard Lifestrategy Balanced Fund$75,735
Vanguard Diversified Bonds Fund$95,438
Vanguard Australian Shares ETF (VAS)$375,102
Vanguard International Shares ETF (VGS)$285,327
Betashares Australia 200 ETF (A200)$280,691
Telstra shares (TLS)$2,110
Insurance Australia Group shares (IAG)$5,828
NIB Holdings shares (NHF)$7,836
Gold ETF (GOLD.ASX)$120,498
Secured physical gold$19,185
Plenti (P2P lending)$48
Bitcoin$588,030
Raiz app (Aggressive portfolio)$20,107
Spaceship Voyager app (Index portfolio)$3,323
BrickX (P2P rental real estate)$5,001
Total portfolio value$2,705,728
(+$3,920)

Asset allocation

Australian shares36.9%
Global shares24.1%
Emerging market shares1.6%
International small companies2.0%
Total international shares27.7%
Total shares64.6% (-15.4%)
Total property securities0.2% (+0.2%)
Australian bonds2.5%
International bonds5.8%
Total bonds8.3% (+3.3%)
Gold5.2%
Bitcoin21.7%
Gold and alternatives26.9% (+11.9%)

Presented visually, the chart below is a high-level view of the current asset allocation of the portfolio.

Chart - Asset Allocation

Comments

Global events, and the outbreak of the tragic war in Ukraine, have dominated the news and financial markets this month.

Within this context, movements in the portfolio seem – and indeed are – largely irrelevant.

The principal financial impact of these events has of course been increased volatility across asset prices. Despite this, however, the overall financial independence portfolio remains approximately where it started the month.

The portfolio has increased around $4,000, or 0.1 per cent, breaking the two months of falls since December last year. Once again the portfolio just – however narrowly – sits above the revised portfolio goal of $2.62 million.

Monthy portfolio value - graph

The most significant trends within the portfolio were the sharp and continued falls in global equities, with losses of around 5.5 per cent.

These falls were matched, however, with an offsetting rise in the value of Australian shares (2.1 per cent) and gold holdings (4.4 per cent).

Through the month bonds and fixed interest holdings continued their decline, with further losses of nearly 2.0 per cent. This leaves the overall bond portfolio at its lowest dollar level since January 2016, and around 20 per cent below – in nominal dollar terms – the level reached in early 2018.

Continue reading “Monthly Portfolio Update – February 2022”