Investment Portfolio Update 2026

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Welcome to my latest portfolio update.

In these posts, I share what’s going on with our investments, explain how things are evolving, and any changes that are being made.

The point here isn’t so you can copy me – it’s simply to provide a bit more transparency around what’s going on behind the scenes.

I’ll share:

— Current wealth allocation
— How much dividends we earned in 2025
— Share portfolio breakdown (and changes)
— Property + share market update
— Our investing plans for 2026

My last portfolio updates were a regular one back in August, and an article in late 2025 explaining what we’re doing with $300k from a property sale.

There are big things planned for 2026 – so let’s get into it!

Current wealth breakdown

As I write this post, here’s the rough allocation of our wealth…

The biggest change from last time is a drop from 12% cash to 1%, as we contributed a sizeable amount to super and invested into shares, which I wrote about here.

And in case you missed it, see how and why I recently changed my super strategy here. 

Even though we’ve offloaded a Perth property, our allocation has actually increased (Home Equity went from 14% to 16%, and Investment Property Equity went from 19% to 23%).

How is this even possible?  Well, every time I look at the estimated values, Perth prices have shot up even further (even being conservative).

When I look back over 15 years of property investing, we’ve now had what would be considered a decent experience (not incredible, but definitely not bad).  More in property in a minute.

Our share portfolio has also done well alongside the Perth property boom in recent years.  Here’s the performance since 2018 split by different Sharesight accounts we’ve had (we switched from individual to joint in 2022):

2018-2022: 11.7% pa
2022-2026: 15.2% pa

That’s some decent compounding.

Neither of these performances change anything fundamental in how I look at the asset classes going forward.  Which might sound odd, but I base my decisions more on principles and the general investment philosophy that I’ve built – a few years of better or worse performance doesn’t change those things.

What makes the most sense depends on the context of the situation, the timeframe involved, and the investor themselves.

Share market update

During calendar year 2025, the two main markets Aussies follow returned the following (total return including dividends):

— US shares (as measured by IVV): 9.2%
— Aussie shares (as measured by VAS): 10.7%

Correct me if I’m wrong, but that’s gotta be the first time in a long time that Aussie shares outperformed the US 😄  Franking credits are a further boost on top.

Sharesight is telling me that our own portfolio returned 9.8% during 2025.  Not too bad.

By the way, I recently wrote an overview of my thoughts on markets and investment options in 2026 in case you missed it.  It’ll certainly be interesting to see how things play out – there’s a lot going on in the world, that’s for sure!

I’ll hopefully be adding a nice amount to our portfolio this year, so lower prices are fine with me (as are higher prices – I don’t really care either way).

Lower prices = accumulate more at attractive prices
Higher prices = get richer with zero effort

To be honest, we’re probably overdue for a period of genuinely CRAP returns.  And I don’t mean another 10-20% drop with a speedy recovery like we’ve been getting.  I mean a sharp drop and possibly a multi-year meandering market that goes nowhere, refuses to recover and tests everyone’s patience and pain tolerance.

Property update

In what will be news to absolutely nobody, property prices have continued to climb across the country, with Darwin, Perth, and Brisbane having the highest growth.

The following charts are from this Cotality report.

And then if you map that together with the amount of properties for sale vs last year, you can get a gauge for whether markets are poised for stronger or weaker conditions.

In addition, there’s also the metric of how long properties are taking to sell, which is telling us that most markets are selling a little quicker than a year prior…

So you’ve got the strongest markets from last year, with even less stock for sale now than before, selling just as quickly or faster.  To me, this suggests more of the same in 2026, with the ‘second-tier’ cities again likely to outperform.

That means selling conditions look good to offload our 2 remaining Perth rental properties this year.  After doing a round-trip to nowhere for 10 years, prices have now effectively doubled in about 5 years – which looks insane recently, but equates to 4.7% per annum over the whole period.

In another positive property outcome, late last year we were able to refinance our 3 mortgages.  This made a difference of $3,000 per month!  We got a better rate, switched to interest-only and also extended the loan term to a fresh 30 years.

I’ve written before about the power of optimising your cashflow where mortgages are concerned.  I’m super happy about the outcome, since we have seven-figures of debt.  I honestly didn’t think we’d qualify, given we have one part-time income, one lumpy sole trader income, and rental/dividend income – hardly what the banks love to work with!

People are like, “But WHY WOULD YOU DO THAT!?!?!”

1- Because I’d rather invest (fun) than pay down debt (boring).
2- The debt has no impact on our lifestyle.
3- I expect higher returns from doing this.

All up, over a lifetime, the difference compounds into a very useful sum of money as I explained in one of the tips in this post.

By the way, if you happen to need a mortgage broker, the link for mine is at the bottom of this post.  Now to check on the cashflow side of things…

Investment income and share portfolio

Here’s the latest chart showing the first six-months of this financial year.  And along with that, our current share portfolio, which is now even simpler than before.

By the way, this includes dividends and franking credits.  I don’t include rental income because of expenses and mortgages, plus these are being offloaded, so they aren’t part of the passive income cash machine 🙂

Explainer on our dividend history:

In 2021, we sold an IP and invested a lump sum.  So the 2022 income would’ve been much higher, but we then ended up selling a big chunk to buy a house (wasn’t planned before).  We then sold another IP and transferred the loan to our current home, giving us a huge pile of cash to invest (explained here). We also decided to become ‘fully invested’ and invest the remaining cash in our offset (explained here), whereas we were drip-feeding the money in before.

As you can see, it looks like the income is tracking slightly below the previous year.  But given the somewhat lumpy nature of index fund dividends, that could change in the next six months.

One thing that reduced our income though is selling our two real estate trusts (REITs).  We ended up using the funds to top up our other holdings – mostly VGS – to continue increasing our global allocation (now sitting at roughly 40%).

Most of you will know that REITs are higher income investments, so naturally this means the overall portfolio now has a lower dividend yield than before.

Why sell?  Well, it’s long been the plan to simplify further.  They were bought opportunistically during the covid crash.  So it’s nice to now have a simple and fairly minimalist portfolio.

As our portfolio becomes more globally diversified, I think the ‘dividend-only’ method of tracking is now undercounting our feasible investment income.

With VGS being quite low yield – say 2-3% – we could sustainably harvest another 1.5% each year.  That would be somewhere close to an extra $10k per year, which is pretty significant.

In a scenario with zero part-time income, I’d definitely do that.  So I may add another layer of calculation to this in the future.  This would give a glimpse of both pure income as well as a practical ‘live off the portfolio’ metric using both dividends and some harvested gains.

Current actions and future plans

As mentioned above, we’ll be selling our two remaining rentals this year.

One lease expires in March, and the other in November (from memory), so they’ll go on market shortly after and see how we go.

People keep asking whether I’m tempted to keep at least one rental because the performance has been so good recently.  The answer is, not really.

The decision to sell was never about performance.  It’s just because a simple share portfolio is incredibly enjoyable to own given its effortless cash-producing nature.

I’m not saying I’d never buy another investment property.  I can easily imagine scenarios where I would (perhaps a topic for another day).  But it’s not on the cards.  Fully building out the share portfolio and completing our property-to-shares transition is far more appealing.

Sure, I may miss out on more capital growth.  Or I might be selling at the perfect time.  Maybe I’d end up holding on as Perth flatlines for half a decade.  Nobody really knows how much longer this boom will run for.

I’ll keep you updated later in the year as things progress.  But our basic plan with the property proceeds is to keep cash aside for tax bills, add some to super, and add the rest to our share portfolio.

There are no plans to keep cash aside to ‘buy the dip’.  If anything, extra borrowings could be used for that 🙂

Here’s another little chart I like keeping track of each year.  Will definitely crack $1,000 in 2026.  If you’re wondering where it goes – almost exclusively conservation, wildlife and animal-based charities.

Final thoughts

That’s about it for this one.  We’re kind of in a waiting period right now, and getting a little excited to selling the first property.

I don’t imagine the market will change much this year.  From our first chat with a sales agent, they’re saying people are just paying any price needed to secure something, so huge FOMO in the market.

It’s been such an interesting period to invest through.  Having the properties do OK initially, then fall and go nowhere for such a long time, then go through the roof in the last 5 years.

I feel somewhat validated for having held on specifically in the late 2010s, when everyone was talking trash about Perth property, nobody wanted to buy, and many investors gave up – right when things were about to turn around.

Zooming out, the property-to-shares transition strategy (that I created out of thin air lol) has worked exactly as I’d hoped.  Time to trademark it and sell a course for $3,999 I guess 😁

The transition will be complete within another year, as we approach the 10 year mark of leaving full-time work – what a journey it’s been.

But enough about me.  What are your investing plans for 2026?  What are you focusing on this year?  Let me know in the comments.

Resources you might find helpful:

💼 Financial Advice
For those wanting personalised guidance with strategy, optimising super, or planning retirement, I can connect you with someone I trust. Find out more.

🏡 Mortgage Broker
Deanna and her team have helped me and many readers with home loan strategies over the years (including debt recycling). Check them out.

📘 Strong Money Australia Book
Your complete guide financial independence in Australia.  Available on Amazon, Audible and Spotify.

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