Monthly Portfolio Update – February 2021

Explorer ship at anchor

Just so the Seabeast cleft the sea,

Running for the home stretch, and just so

She glided, borne by her own impetus.

Virgil, The Aeneid Book V.280-282

This is my fifty-first monthly portfolio update. I complete this regular update to check progress against my goal.

Portfolio goal

My objective is to reach a portfolio of $2,585,000 by 31 July 2022. This would produce a real annual income of about $90,500 (in 2021 dollars).

This portfolio objective is based on an assumed safe withdrawal rate of 3.5 per cent.

Portfolio summary

Vanguard Lifestrategy High Growth Fund$780,296
Vanguard Lifestrategy Growth Fund$43,020
Vanguard Lifestrategy Balanced Fund$79,084
Vanguard Diversified Bonds Fund$104,841
Vanguard Australian Shares ETF (VAS)$279,959
Vanguard International Shares ETF (VGS)$124,196
Betashares Australia 200 ETF (A200)$261,896
Telstra shares (TLS)$1,641
Insurance Australia Group shares (IAG)$6,322
NIB Holdings shares (NHF)$6,648
Gold ETF (GOLD.ASX)$102,453
Secured physical gold$16,462
Plenti (P2P lending)$4,954
Bitcoin$650,610
Raiz app (Aggressive portfolio)$19,779
Spaceship Voyager app (Index portfolio)$3,077
BrickX (P2P rental real estate)$4,454
Total portfolio value$2,489,692
(+$171,325)

Asset allocation

Australian shares35.5%
Global shares19.8%
Emerging market shares1.7%
International small companies2.2%
Total international shares23.7%
Total shares59.2% (-15.8%)
Total property securities0.2% (+0.2%)
Australian bonds3.1%
International bonds6.6%
Total bonds9.7% (-5.3%)
Gold4.8%
Bitcoin26.1%
Gold and alternatives30.9% (+20.9%)

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

Comments

There are no real precedents for the events affecting the portfolio over the last several months.

This month, a sharp appreciation of the price of Bitcoin – by over 30 per cent – has delivered the third single largest monthly gain of the record. As a result the portfolio has grown by over 7 per cent in a single month, increasing by around $171,000.

This significant growth has come following a series of positive months since October, leading to the overall portfolio increasing by nearly 40 per cent over the past five months.

As occurred in January, changes in the value of Bitcoin dominated any other changes over the course of the month. In fact, Bitcoin appreciation represents over 90 per cent of the gains. By contrast, Australian equities were up around 2 per cent, and international equities, bonds, gold holdings all lost value.

The end of the month brings into view a deeply peculiar and unlooked for landmark. Having reset to a higher portfolio goal just two months ago, with a target timeline of July 2022, this goal is already rather close to being achieved.

Continue reading “Monthly Portfolio Update – February 2021”

Monthly Portfolio Update – January 2021

The most difficult thing is the decision to act, the rest is merely tenacity.

Amelia Earhart

This is my fiftieth monthly portfolio update. I complete this regular update to check progress against my goal.

Portfolio goal

My objective is to reach a portfolio of $2,585,000 by 31 July 2022. This would produce a real annual income of about $90,500 (in 2021 dollars).

This portfolio objective is based on an assumed safe withdrawal rate of 3.5 per cent.

Portfolio summary

Vanguard Lifestrategy High Growth Fund$775,158
Vanguard Lifestrategy Growth Fund$43,025
Vanguard Lifestrategy Balanced Fund$79,641
Vanguard Diversified Bonds Fund$107,429
Vanguard Australian Shares ETF (VAS)$269,445
Vanguard International Shares ETF (VGS)$117,712
Betashares Australia 200 ETF (A200)$257,703
Telstra shares (TLS)$1,662
Insurance Australia Group shares (IAG)$6,144
NIB Holdings shares (NHF)$6,624
Gold ETF (GOLD.ASX)$109,475
Secured physical gold$17,648
Plenti (P2P lending)$5,480
Bitcoin$494,160
Raiz app (Aggressive portfolio)$19,508
Spaceship Voyager app (Index portfolio)$3,106
BrickX (P2P rental real estate)$4,447
Total portfolio value$2,318,367
(+$52,337)

Asset allocation

Australian shares37.4%
Global shares20.9%
Emerging market shares1.8%
International small companies2.3%
Total international shares25.0%
Total shares62.4% (-12.6%)
Total property securities0.2% (+0.2%)
Australian bonds3.4%
International bonds7.2%
Total bonds10.5% (-4.5%)
Gold5.5%
Bitcoin21.3%
Gold and alternatives26.8% (+16.8%)

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

Pie chart of asset allocation

Comments

This month the portfolio has increased by over $52,000, extending the strongest period of growth since this record started.

This has contributed to an expansion in the overall portfolio of over 25 per cent since the beginning of October last year. In this month alone the portfolio grew around 2.3 per cent.

Monthly portfolio growth 2017-2021

Increases in the price of Bitcoin have provided the key motive force for the portfolio both this month and since October. Equities have made a smaller contribution since October, but the value of equity holdings actually fell slightly this month.

Part of this is related to the reduction in value arising from the payout of substantial distributions earlier this month, which will be averaged back into the portfolio over the next six months. The value of gold and fixed interest holdings have also marginally declined.

Stepping back, the result of this is the strongest consecutive four month performance of the portfolio on record, based quite narrowly on the fortunes of just two of its components, equities and Bitcoin.

Continue reading “Monthly Portfolio Update – January 2021”

Portfolio Income Update – Half Year to December 31, 2020

I must go down to the seas again, for the call of the running tide

Is a wild call and a clear call that may not be denied;

And all I ask is a windy day with the white clouds flying,

And the flung spray and the blown spume, and the sea-gulls crying.

John Masefield, Sea Fever

Twice a year I prepare a summary of total income from my portfolio. This is my ninth portfolio income update since starting this record. As part of the transparency and accountability of this journey, I regularly report this income.

My goal is to build up a portfolio capable of providing a passive income of around $90 500 by July 2022 (Portfolio Goal).

Portfolio income summary

InvestmentAmount
Vanguard Lifestrategy High Growth (retail fund)$26,278
Vanguard Lifestrategy Growth (retail fund)$1,799
Vanguard Lifestrategy Balanced (retail fund)$3,217
Vanguard Diversified Bonds (retail fund)$4,469
Vanguard Australian Shares ETF (VAS)$3,071
Vanguard International Shares ETF (VGS)$793
Betashares Australia 200 ETF (A200)$3,037
Telstra shares (TLS.ASX)$43
Insurance Australia Group shares (IAG.ASX)$0
NIB Holding shares (NHF.ASX)$48
Plenti/Ratesetter (P2P lending)$343
Raiz app (Aggressive portfolio)$77
Spaceship Voyager app (Index portfolio)$0
BrickX (P2P rental real estate)$37
Total Portfolio Income – Half-Year to December 31, 2020$43,212

The chart below sets out the income or distributions received on a half-yearly basis from the financial independence portfolio over the past five years.

Continue reading “Portfolio Income Update – Half Year to December 31, 2020”

Dead Reckoning – Setting a New Portfolio Goal and Safe Withdrawal Rate

To unpath’d waters, undream’d shores

Shakespeare A Winters Tale, Act 4, Scene 4

This exploration began four years ago, with an initial objective of building a passive income of $58,000 per annum by July 2021. Since that time, goals have evolved and changed enabling bringing forward the achievement of this initial goal.

Each year in early January I spend time reviewing my investment goals and how I plan to reach them.

This post explains the findings from my annual review, details my updated portfolio goal and assumptions, and discusses how I will approach my financial independence journey through 2021 and beyond.

The aim is to have a clear written record of the objectives, approaches and reasoning underlying the plan, to serve as a reference point through the year. The process also enables the updating of plans and assumptions for changes in circumstances, thinking, as well as data and evidence.

Ports of call and the future of the voyage

In the middle of December 2020 I passed the single portfolio objective I set myself in early 2020, six months earlier than targeted.

Continue reading “Dead Reckoning – Setting a New Portfolio Goal and Safe Withdrawal Rate”