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On the road to financial freedom - October update 📊

October marks the end of one of the most turbulent months for my portfolio. My portfolio reached a new ATH and I had the highest absolute daily gain (approx. 50,000 euros) and the highest daily loss (also approx. 50,000 euros) within a few days.

Start: 1,116,452 euros

End: 1,152,698 euros

Deposit: 26,034 euros

Profit: + 10,212 euros (+0.89%)

Anyone who has ever looked at my portfolio will know that I am significantly overweighted in gold, or more precisely in gold mines. This quickly explains the reason for the volatility. 🎢

In the shadow of the gold price, mines have of course also risen disproportionately. With the slump in the gold price by 10% in places in just a few days, the good performance of the mines also came to an end. Some of the junior mines recorded price falls of over 50% in just one week (fortunately not mine).

While gold $4GLD (+0.01%) still rose by +3.8% in October, the October performance of K92 Mining (my largest position) was $KNT (+0.11%) (my largest position) was +5.5% and Equinox Gold $EQX (-1.39%) was +0.8%. I assume that gold will continue to perform well, as none of the problems (geopolitical tensions, inflation, etc.) have been solved. For this reason, I have also taken another small position $SCZ (-4.18%) (SantaCruz Silver Mining) in the portfolio. The crash offered a very good opportunity! 📈

Novo-Nordirsk performed less well this month $NOVO B (-1.6%) with -15% and PayPal $PYPL (-1.32%) with +3.9%. PayPal is particularly disappointing here, as the quarterly figures were excellent. This sent the share up almost 18% intraday. Unfortunately, it was subsequently sold off completely. But this confirms my belief that you just have to be patient with PayPal. The day of truth for Novo-Nordirsk will come next week... 📉

Otherwise, I received around 700 euros in dividends this month and realized around 3,000 euros in gains on Mercedes and Alibaba, among others. 💵

➡️🆓: On my way towards 4 million total assets, the target achievement rate is now 39.9%. 😊

Let's see how November turns out. As always, it remains exciting!

26 Comments

Epi@Epi

To everyone else who thinks that the promised land of financial freedom has been reached with a custody account volume of 1 million: That's a mistake - it just goes on in the hamster wheel of capital targets! 😁

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Part_Time_Joe@Part_Time_Joe

@Epi... if you don't want to live frugally, then a million is definitely not the end of the line 😉

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Epi@Epi

@Part_Time_Joe What do you mean by "living frugally"? With my 1.5%pM target return (YTD I'm at 3%pM), 1million means about 15k€pM. I could live much more generously with that than I do now and I wouldn't call my life frugal. 🤷

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Part_Time_Joe@Part_Time_Joe

@Epi I calculate with the usual average values myself - 7% return p.a. With 1 million, you're at around 50,000 net. But since you can't / don't want to pay out everything, you would have around 20,000 - 25,000 euros net to live on. I think that's pretty frugal.

Of course, a higher return is only possible with a higher risk.

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Epi@Epi

@Part_Time_Joe The fact that more return is only possible with more risk is a story that financial market science has come up with and that the financial market industry has happily adopted in order to keep people like you, who actually have enough, on the hamster wheel. The industry thrives on people like you with your mindset. Of course, they won't tell you that more return is possible without more risk. Or why do you think they should saw off the branch they're sitting on? 😏

I get the 1.5%pM with a drawdown of no more than 20%pa. That's 1/3 of the risk of the ACWI.

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Part_Time_Joe@Part_Time_Joe

@Epi Then the trick is quite simple. If you can make 1.5% a month and you don't have the capital, then you simply have to take out a consumer loan. It may cost you 10% p.a., but the bottom line should still be clearly positive.

But I just don't believe in that 😉

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Epi@Epi

@Part_Time_Joe The 1.5%pM is already with debt capital. It just doesn't work without. And even more debt capital worsens the CRV below the optimum. 😏

Why don't you think the return is possible?

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Part_Time_Joe@Part_Time_Joe

@Epi Don't get me wrong. I do believe that it is possible. This year, for example, I also have a return of around 25% to date (and similar in recent years).

But in my opinion this always goes hand in hand with additional risk. In my case, a clear concentration on 3 individual stocks and a focus on one asset (gold). At the same time, within this class, focus on junior mines.

So what I'm saying is... with a diversified ETF portfolio, which is the classic definition of low-risk, you can't generate these returns in the long term. Even Warren Buffet didn't make his fortune by betting on 30 different companies, but by putting "all his eggs in one basket", at least at the beginning.

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Epi@Epi

@Part_Time_Joe Hmm, I have achieved the return with a very diversified ETF portfolio and intend to continue to do so. Backtests of my basic strategy go back over 50 years. The return is stable at 20%pa, the drawdown is manageable at max 20% and definitely lower than B&H ACWI. But maybe I have overlooked something fundamental?

That's why I'm asking you why you think that's not possible. Simons has been stable 60%pa since mid 80s. Soros north of 30%pa since the 60s. Lynch, Buffett north of 20%pa. So why shouldn't 20%pa be possible?

It's not about being right or anything, it's about the central question of when and how you are financially free. According to the current figures, with 400k I would be where you want to be with 4m. Something doesn't fit. And I would like to understand that.

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Part_Time_Joe@Part_Time_Joe

@Epi What does your ETF strategy look like? Do you use leverage? You can't have achieved the return with a classic buy & hold strategy, at least not with the regular indices?

With Simons (Renaissance), Soros or Buffet you have listed absolute exceptions. All three have either taken high risks (at least at the beginning) or have opportunities that are not available to "normal people" - in the case of Simons in particular intellectual abilities.

I don't follow a buy & hold strategy either, but more or less actively trade individual stocks based on a mixture of momentum and fundamentals - difficult to explain.

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Epi@Epi

@Part_Time_Joe Correct, I have said goodbye to classic B&H. 7%pa at 60% max drawdown and 3%pa safe withdrawal rate are simply not enough for me. I would need 4 million or so to be financially free. 😅

If you've been following my posts here, you'll know that I've been actively building a multi-strategy, multi-asset portfolio since early 2023 with a lot of reading and testing. This resulted in the 3xGTAA Wikifolio certificate (50%pa, 30%mDD) and the 2xSpytips strategy (20%pa, 20%mDD) - both in my profile. I also run three other uncorrelated strategies, each with 15-20%pa expected return. The whole thing is optimized with Markowitz Sharpe ratios. This makes the overall return really stable, I'm amazed myself.

In addition to Simons, Soros and Buffett, there are many others who perform well above market returns in the long term. All of them are certainly special intellects. But perhaps you don't have to be such a great one, but simply not take the current paradigm of financial market theory at face value without question? Maybe I'm not the smartest of investors, but I can break down paradigms (there's an article on this in the Bestof).

My main 3xGTAA strategy is simply a composite of Meb Faber's combo of the Ivy Portfolio with Dual Momentum and the idea of combining leveraged ETFs with trend following. Amazingly simple really, but the basis seems to me to be relatively secure, so that the excess return is not arbitraged away so quickly. Basically, it should work as long as nobody believes it will work. 😏
So: what am I actually doing here? There's nothing to see, move along please! 😅

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View all 5 further answers

Homer@Simpson

My personal opinion on the portfolio
https://youtu.be/LG2hvf9k_jE?si=hKt3-GxNAj6WMrVx

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Part_Time_Joe@Part_Time_Joe

@Simpson That really hits me now. "Homer" doesn't like my portfolio. Damn! 😩

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Homer@Simpson

@Part_Time_Joe We don't have a single common position 😂

Otherwise a strong sum and who knows how the stock market will perform in the next few years and which stocks will bring the best returns

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Part_Time_Joe@Part_Time_Joe

@Simpson In April and the following few months we would at least have had Alphabet as a joint position. But with today's knowledge, I sold it again too early... 😉

True words, although that doesn't mean we can't outperform both. We will see!

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Alfred E.@Papiertiger

And what do we do next

--> Proclaim 25 million as the target 😂. Would at least be the point where I would simply call myself completely financially free from 2% net dividend or safer net return in something.
Living on ~€500,000 p.a. / making the family happy without it becoming less. 😇

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Part_Time_Joe@Part_Time_Joe

@Papiertiger That might be a bit of an exaggeration... 😉

I would say that there are different levels of financial freedom. For me, financial freedom starts at the point where I can live a comfortable life even with a potential family without having to work (I'm not saying I wouldn't).

For that I would need at least 50,000 net a year. Using the 25 rule of thumb, that would mean you'd need about 1.25 million. But if you factor in inflation and risk buffers and don't want to use up your capital completely, you'll quickly end up with figures above 2 million.

But this is of course a very individual value. You can achieve a certain degree of financial independence much earlier!

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Alfred E.@Papiertiger

@Part_Time_Joe I wish you every success with it (without meaning it in a funny way).

Realistically, with inflation, I would consider 100k net per person p.a. to be a good value. That would put you at around 8-10 million at 3 ...

I started investing too late and with a family it's all about making the best of it.

I'd be really happy if I could retire with 1-5 million in total net assets for 2+1 children in 20 years.

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Part_Time_Joe@Part_Time_Joe

@Papiertiger Thank you! Whereby I need luck with your target values ... and a lot of it 😂

I don't think such a value is realistic for me to achieve. 3-4 million total assets with a bit of luck in the next 10 years okay, but beyond that let's see.

The problem is that the contribution made by the salary keeps decreasing (in percentage terms). So when it comes to wealth accumulation, you have to rely more and more on markets that are doing well. That wasn't a problem in the past. But what do you do if you have a phase of 3-4 years where the markets go sideways? It is said to have happened before...

Either way. We make the best of it 😉

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Joris@JorisInvests

20H

@Part_Time_Joe if you contribute every month about 26000, you only need about 9y8m to reach the 4 million 😅. Numbers I can only dream about, but I'm doing my best and one day the million will be there 🤞🏻

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Part_Time_Joe@Part_Time_Joe

20H

@JorisInvests I wish! Unfortunately it’s not a contribution in the classical sense. I have a so called „Verrechnungskonto“, which is not accounted for in the app - in other words my cash on hand reserved for the portfolio.
I used it to take advantage of the sell-off of the mining stocks.

Currently the cash balance is close to zero. Unless I reallocate money from other assets there won’t be any significant contribution this month 😂

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