June 2024 FIRE Portfolio Update: Blow Off Top! | Johnny Africa

June 2024 was the blow off top in this bull market that saw markets achieve all time highs over and over again. The bull market that has been raging since November 2023 showed no signs of subsiding in June of 2024. Inflation kept trending down and expectation for rate cuts continued to increase. NVidia completely dominated the entire world by making a 10 for 1 split and promptly rallying 10% the day of the split (and 10% before the split). Nvda became the biggest company surpassing Microsoft and Apple and it looks like it’s here to stay.

If you haven’t already read my posts before, I achieved Financial independence back in late 2020 early 2021 with a portfolio of roughly $1.3m invested in mainly ETFs. This ballooned to $1.7m during the peak of the markets in early 2022 before coming back down to Earth later in 2022.

This post will be part of a monthly series of portfolio updates that summarizes how my portfolio performed, what trades I executed, what my monthly expenses were, and my general outlook on the economy/markets. This is by no means financial advice so do not look look at me for sage advice. I make stupid trades and make even worse losses quite frequently.

This is simply the performance of my portfolio and how it has performed on a month to month basis.

Monthly Highlights – June 2024

Net worth is near $1.9m as of June 2024 Month end+$80k for the monthSpent a few weeks in Da Nang, Vietnam to get some suits made. Da Nang has quickly become a premier digital nomad destination and it’s not hard to see why. This beautiful beach city is incredibly cheap and vibrant. Finished the month traveling around the Greek islands because who needs a reason to visit Greece again?!

Market Moves

What is in my portfolio?

My portfolio is quite simple and straight forward. I have my holdings primarily spread out between a few ETFs, fixed income, and various single name stocks.

Fixed Income

Due to rising rates, I’ve also allocated a small part of my portfolio (<5%) to fixed income products. I’ve been purchasing 5.5% yielding treasury bills with a 3-6 month expiry. I currently have about ~$60k invested in a 3-mo T-Bill that will expire in June 2024.

After expiring mid June, I bought another 3 month treasury paying about 5.4% expiring in mid September.

This is guaranteed money with zero risk which I decided to take advantage of while waiting for better entry points. However, it seems like this money probably would have been better used just buying the market but this is opportunity cost I’m willing to sacrifice.

I also purchased I-Bonds in 2022 at the height of inflation peak when I-Bonds were paying 9.5%. The rates have come down significantly since then as inflation itself has come down. The optimal time for me to sell these bonds were on Dec 1, 2023 as that would have been the last month I was eligible for the higher rate of 6.4% (still higher than what treasuries paid). As you must forfeit three months of interest upon withdrawal before 5 years, in total my blended rate of return was around 8% for 15 months which is definitely something I can live with.

ETFs

Again, my primary holdings are in a few ETFs. My primary holdings are in VTI, VGT, and VCR. I’ve always been a big proponent of big tech and have been heavily invested in the Nasdaq for over a decade. This has paid off very well for me given the massive bull market of the 2010s and is essentially what allowed me to FIRE so quickly.

I used to hold more dividend generating stocks as I was really into this type of investing at a period of time. I currently do not have many dividend specific ETFs as I prefer growth more than income. This kind of goes against the ethos of financial independence but I have enough money coming in from other sources that I don’t need to focus so much on income.

I added to my ETF positions in June 2024 even though the markets only dipped near the end of the month.

Single name stocks

Some of the single name stocks I own are the following

TSLABRK.BNFLXRITMASMLANETARES

These single name stocks make up less than 10% of my total portfolio. I tend to not buy much single name stocks anymore as there’s no point to take on unnecessary risks when I’m already so diversified with my ETFs.

Real Estate

I currently own no real estate. I used to own property in the US but have sold it in 2022 before rates started rising. I am not a big fan of real estate. While it definitely can be a good investment, I don’t think it beats investing in the markets. In addition, real estate is highly illiquid with high transaction costs that few people consider.

Finally, as someone that travels around the world and does not like to be tied down to one location, real estate doesn’t make sense as managing it from afar creates a bunch of headaches. I much prefer to have my money liquid and in the stock market.

June 2024 was the almighty bull of all bulls. If the past few months hadn’t already been enough of a bull run, June took it into overdrive. While there was a small dip at the end of June, this was quickly bought back up without any issue. Markets rallied to new all time highs during the month led by the one and only Nvidia. This company has experienced a Bitcoin-esque rise in the last year rising 200% in the last year and some 3000% in the last 5 years. Absolutely ridiculous.

Nvidia eclipsed the market caps of Microsoft and Apple and doesn’t seem like it’s losing any momentum anytime soon. Forward PE is only 40 which is high by historical standards, but not unreasonable for a name like Nvidia.

As you can see from the below screenshot which I always monitor using the CME Fed Fund Futures website, rate cuts are brought forward and now the market is pricing in a cut in Sep 2024. I had always expected that this might be a possibility given it is an exlection year and Jerome Powell will want to show something in the rate cutting path, probably as a way to help out Biden in beating Trump. Trump more or less owned Powell during his last presidential term and only God knows what he would do with Powell in a second term.

In June 2024, markets rallied 6-7% on the Nasdaq (Nasdaq is up almost 30% YTD) and about 4% on the S&P 500.

Many market analysts are calling for a market correction in July or some sort of sector rotation out of tech but unless the Fed completely changes course on its rate cutting trajectory, I just don’t see what the catalyst for these things would be. Who knows, just keep buying and move on!

Market Value of Portfolio

Here is a history of my portfolio value. As you can see, it’s moved in line with the markets as should be the case since most of my holdings are in ETFs that track the S&P 500 and the Nasdaq.

In total, my portfolio is sitting somewhere around $1.86m which also includes cash and fixed income positions. This probably be over $1.9m if it weren’t for my covered call MTM losses.

Trades executed for the month of June 2024

June was a quiet month for my trading regime. I bought some more of VGT on dips (which were not many) and slowly just letting the markets ride. No covered calls or cash secured puts in the month of June.

Summary of stock and ETF purchases

Portfolio withdrawals and expenses

Withdrawals from my portfolio is an important part of the financial independence ethos. The 4% withdrawal rate rule is one of the main concepts of the FIRE movement which I try to adhere to. Generally, I prefer to sell from my portfolio when markets are near or at all time highs to capture, and only when I actually need the cash.

For the month of June 2024, I traveled to Da Nang in Vietnam to get suits made. This area of Da Nang and Hoi An are known to be some of the best and cheapest custom suit making spots in the world. I spent almost two weeks hanging out in Da Nang checking out the digital nomad scene. Da Nang is the digital nomad hotspot of Vietnam and one it’s not hard to see why. It’s probably the cheapest place I’ve ever been to as far as digital nomad destinations. There is amazing food to be had, beaches, and great accommodation options.

After Vietnam, I went to the Greek Islands in Europe because summer in Europe is just the absolute best. The Cyclades are my favorite islands in Europe so I had to get my fix of the islands in!

I made no withdrawals from the portfolio as I had enough cash coming in from my blog as well as leftover cash from other sources. My blog generates money every month to the tune of $3-4k and I cover exactly how I earn money from blogging in other posts.

Dividend Income

For June, I collected a total of $3,490 in dividends. I typically reinvest my dividends which has served me well during the market downturn of the last year or two. I think I will probably stop reinvesting dividends in the near term as I like to keep a cash pile while stocks are at all time highs to reinvest when markets eventually dip.