Tomorrow we’ll sail the wide seas again
Horace, Odes, Bk I:VII
This is my sixty-eighth 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 | $714,803 |
| Vanguard Lifestrategy Growth Fund | $38,546 |
| Vanguard Lifestrategy Balanced Fund | $70,603 |
| Vanguard Diversified Bonds Fund | $90,727 |
| Vanguard Australian Shares ETF (VAS) | $355,563 |
| Vanguard International Shares ETF (VGS) | $348,094 |
| Betashares Australia 200 ETF (A200) | $268,999 |
| Telstra shares (TLS) | $2,073 |
| Insurance Australia Group shares (IAG) | $5,663 |
| NIB Holdings shares (NHF) | $8,688 |
| Gold ETF (GOLD.ASX) | $113,675 |
| Secured physical gold | $18,168 |
| Plenti (P2P lending) | $6 |
| Bitcoin | $378,820 |
| Raiz app (Aggressive portfolio) | $19,389 |
| Spaceship Voyager app (Index portfolio) | $3,125 |
| BrickX (P2P rental real estate) | $4,650 |
| Total portfolio value | $2,441,592 (+100,776) |
Asset allocation
| Australian shares | 38.6% |
| Global shares | 28.1% |
| Emerging market shares | 1.6% |
| International small companies | 2.0% |
| Total international shares | 31.7% |
| Total shares | 70.2% (-9.8%) |
| Total property securities | 0.2% (+0.2%) |
| Australian bonds | 2.6% |
| International bonds | 6.0% |
| Total bonds | 8.6% (+3.6%) |
| Gold | 5.4% |
| Bitcoin | 15.5% |
| Gold and alternatives | 20.9% (+5.9%) |
Presented visually, the chart below is a high-level view of the current asset allocation of the portfolio.
Comments
This month the portfolio grew strongly, gaining around $100,000 following the three preceding consecutive months of large losses.
A growth of this size is a relatively unusual event in the record since 2017, having only happened around ten times previously. It is similar in size to the the recovery shortly after the March 2020 coronavirus induced market uncertainty.
The portfolio has grown by around 4.3 per cent, to recover to a level first reached across early 2021. It remains, however,well below the revised portfolio goal of $2.62 million at the end of the month.
The majority of gains over the month were caused by a 20 per cent increase in the price of Bitcoin, off June lows. These increases represented around two-thirds of the portfolio’s movement this month.
Both Australian and international equities also increased.
Global shares increased in value by 4.7 per cent through the month, with some of this gain likely related to the impact of a falling Australian dollars on the unhedged component. Australian equities increased by around 3 per cent.
At the same time, dividends of around three per cent were paid out in the case of Australian shares, and less than one per cent in the case of international equities. As these are generally held for regular reinvestment, this can introduce an apparent downward movement in the case of distribution months such as January and July.
Bonds continued a recent pattern of correlation with equities, rising in value around 3 per cent. Gold underwent a significant price decline this month, of around 4.5 per cent.
Continue reading “Monthly Portfolio Update – July 2022”