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 shares | 36.9% |
| Global shares | 24.1% |
| Emerging market shares | 1.6% |
| International small companies | 2.0% |
| Total international shares | 27.7% |
| Total shares | 64.6% (-15.4%) |
| Total property securities | 0.2% (+0.2%) |
| Australian bonds | 2.5% |
| International bonds | 5.8% |
| Total bonds | 8.3% (+3.3%) |
| Gold | 5.2% |
| Bitcoin | 21.7% |
| Gold and alternatives | 26.9% (+11.9%) |
Presented visually, the chart below is a high-level view of the current asset allocation of the portfolio.
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.
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”