Wealth is the number of things one can do without.
Dostoyevsky
This is my one hundred and seventh 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 $3,000,000. This should be capable of producing an annual income from total portfolio returns of about $103,500 (in 2025 dollars).
This portfolio objective is based on an assumed safe withdrawal rate of 3.45 per cent.
A secondary focus will be maintaining the minimum equity target of $2,400,000.
Portfolio summary
| Vanguard Lifestrategy High Growth Fund | $982,388 |
| Vanguard Lifestrategy Growth Fund | $49,545 |
| Vanguard Lifestrategy Balanced Fund | $85,573 |
| Vanguard Diversified Bonds Fund | $94,830 |
| Vanguard Australian Shares ETF (VAS) | $676,504 |
| Vanguard International Shares ETF (VGS) | $976,970 |
| Betashares Australia 200 ETF (A200) | $344,971 |
| Telstra shares (TLS) | $2,601 |
| Insurance Australia Group shares (IAG) | $9,958 |
| NIB Holdings shares (NHF) | $9,048 |
| Gold ETF (GOLD.ASX) | $272,257 |
| Bitcoin | $1,866,054 |
| Plenti Capital Notes | $84,000 |
| Total portfolio value | $5,454,701 (+$9,064) |
Asset allocation
| Australian shares | 26.4% |
| Global shares | 26.1% |
| Emerging market shares | 1.0% |
| International small companies | 1.2% |
| Total international shares | 28.3% |
| Total shares | 54.7% (-25.3%) |
| Australian bonds | 2.9% |
| International bonds | 3.2% |
| Total bonds | 6.1% (+1.1%) |
| Gold | 5.0% |
| Bitcoin | 34.2% |
| Gold and alternatives | 39.2% (+24.2%) |
Presented visually, the pie chart below is a high-level view of the current asset allocation of the full portfolio.
Comments
This month saw the overall portfolio only move marginally, rising $9,000, or around 0.2 per cent, compared to last month.
A notable feature of this month was the financial portfolio composed of traditional assets performing relatively strongly, registering gains of around $63,000. This occurred alongside falls in Bitcoin holdings, where prices declined by 2.8 per cent.
This is a continuation of a trend. The past seven months has represent the largest single period of unbroken expansion in the financial portfolio, taking the financial portfolio close to $0.5 million – or nearly 15 per cent – higher.
The chart below sets out the performance of both the full and ‘financial assets only’ portfolios since the commencement of the journey.
By far the most remarkable movements over the past few weeks have been increases – and then falls in – in the value of gold holdings. Of itself, this magnitude of monthly movements is a highly unusual event.
Gold movements over the past month have echoed those experienced in earlier periods across the mid to late 1970s, a period which featured significant global disruption, high inflation, and heightened economic uncertainty.
In some senses, these previous periods could be considered the turbulent precursors of the macroeconomic regime that last from the early 1980s to either 2008, or perhaps 2020. Features of this period were generally declining real rates, a reduction in the role of gold as a central reserve bank asset, and generally high equity returns.
What is unclear is what new regime may be being ushered into existence by, for example, the increasing pace of gold purchases from central banks, and a parallel reduction in the role of US Treasury bonds as a reserve asset, a trend accelerated by the freezing of US Treasury holdings in the Russian central bank across 2022-23.
The price changes in gold over recent month have already disrupted one long standing verity of asset allocation – with gold moving from a historically low return asset, to an asset that has, for example, clearly out-performed Australian equity markets over some substantial timeframes on a total return basis, i.e. 15 and 20 years.
By contrast, over the month, Australian equities fell marginally over the month (-0.5 per cent) while global equities advanced solidly, with appreciation of around 3.4 per cent.
This month once again a further investment in the Vanguard global shares ETF (VGS) was made, in accordance with my previously outlined strategy of gradually reinvesting excess distributions and cash across the next 14 months.
Clearing bearing: trends in financial portfolio asset allocation from 2007 to 2025
Recently a major investment bank commented on the recent rapid increases in the prices of gold and Bitcoin, labelling investors as engaging in ‘the debasement trade’.
This trade was termed in that way as a reference to investors seeking to avoid ‘fiat’ currencies or any other reproducible paper assets, and instead engaging in a scramble for truely scarce, limited assets.
Continue reading “Monthly Portfolio Update – October 2025”
