Here is the update for my Daedalus portfolio for September 2024. If work is not too busy, I will try to provide an update where possible.

I explain how I constructed this portfolio in Deconstructing Daedalus Income Portfolio. You might not understand what I wrote below if you haven’t read this post.

All my personal planning notes such as income planning, insurance planning, investment & portfolio construction will be under my personal notes section of this blog. You can also find the past updates in the section.

Portfolio Change Since Last Update

The portfolio was valued at $1.436 million at the end of August and is currently at $1.434 million at the end of September.

We reported a portfolio change of -$2,000 for September 2024.

As of 4th October 2024, the portfolio is valued at $1.444 million.

Here are the primary security holding returns for the month-to-date and year-to-date:

The returns of Dimensional funds are in SGD, with the rest in USD. I have also listed the major index ETF performance for comparison. Had I listed the Dimensional funds in USD, the performance would have been roughly 3% higher YTD.

The big difference between August and September is the much improved performance of the Emerging markets. EIMI returned 5.91% for the month compared to 0.69% in August. Emerging market performance improved from 9.53% to 16.01% year-to-date.

US small cap continued to show volatility, and since this forms a sizable 31% of the portfolio, it will be a drag.

The portfolio lost 1.2% to strengthening the SGD against the USD. Since end of September, the portfolio was helped by the 1.5% weakening of the SGD against the USD.

Role of Portfolio

The goal of the portfolio is to provide consistent, inflation-adjusted income for my essential and basic spending. The portfolio is sized based on a conservative 2-2.5% Initial Safe Withdrawal Rate (SWR) so that the income can last even considering challenging historical sequences such as the Great Depression, external war and 30 years of high inflation averaging 5.5-6% p.a.

The timeframe that the income stream to be planned for: 60 years to Perpetual

I am currently not drawing down the portfolio.

For further reading on:

1. My notes regarding my essential spending.
2. My notes regarding my basic spending.
3. My elaboration of the Safe Withdrawal Rate: Article | YouTube Video

Based on the current portfolio of $1.444 million, the projected starting income is:

The lower the SWR, the more capital is needed, but the more resilient the income is.

Nature of the Income I Planned for

Suppose when I start drawing the income, the previous year’s inflation goes in this sequence and here is the corresponding income to be drawn out:

The income strategy is constructed to withstand this high inflation

Investment Strategy & Philosophy

After trying my best to learn how to invest for a while, the portfolio expresses my thoughts about investing at this point.

The portfolio is run in a

1. Strategic: allocation doesn’t change by short-term events.
2. Systematic: rules/decision-tree-based implemented either myself or an external manager.
3. Low-cost: investment implementation cost is kept reasonably low both on the fund level and also on the custodian level.
4. Passive: I spend relatively little effort mentally considering investments and also action-wise.

You can read more in this note article: Deconstructing Daedalus My Passive Income Investment Portfolio for My Essential & Basic Spending.

Portfolio Change Since Last Update (Usually Last Month)

There are zero portfolio changes this month.

This is a low-cost, strategic and systematic portfolio. We should not have much changes.

Current Holdings

The following table is grouped based on general strategy, whether they are:

1. Fixed Income / Cash to reduce volatility.
2. Systematic Passive, which tries to capture the market risk in a systematic manner.
3. Systematic Active, which tries to capture various proven risk premiums such as value, momentum, quality, high profitability, and size in a systematic manner.
4. Long-term sectorial positions.

Portfolio by Account Location

Portfolio by Region of Securities

Portfolio by Fund, Cash or Individual Security

Portfolio by Strategy.

Main Custodians

The current custodians are:

1. Cash: Interactive Brokers LLC (not SG)
2. SRS: iFAST Financial

If you want to trade these stocks I mentioned, you can open an account with Interactive Brokers. Interactive Brokers is the leading low-cost and efficient broker I use and trust to invest & trade my holdings in Singapore, the United States, London Stock Exchange and Hong Kong Stock Exchange. They allow you to trade stocks, ETFs, options, futures, forex, bonds and funds worldwide from a single integrated account.

You can read more about my thoughts about Interactive Brokers in this Interactive Brokers Deep Dive Series, starting with how to create & fund your Interactive Brokers account easily.

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