How I Turned $1.8M Into a Daedalus Income Machine That’s Crushing It in October 2026—And Why You’re Missing Out If You’re Not Paying Attention!

Ever wonder how a well-oiled investment machine keeps churning steady returns while the market throws its usual curveballs? October 2026 brought a fascinating mix of tech tremors and energy booms that tested the resilience of the Daedalus portfolio — my carefully crafted fortress aiming to deliver inflation-adjusted income that lasts a lifetime. I’m not just crunching numbers here; I’m peeling back the layers on why some sectors stumbled while others thrived, and more importantly, how a strategic, systematic approach helps navigate these swings without breaking a sweat. If you’re curious about what fuels this portfolio’s engine—from multifactor funds dancing to their own rhythm to bonds bouncing back after a rough September—stick around. I’ll break down the nitty-gritty of portfolio performance, the role of safe withdrawal rates, and how all these pieces fit into a long-term income plan that’s built to weather storms, not just sunny skies. Ready to dive deeper and see how all this plays out in real time? LEARN MORE

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Here is the update for my Daedalus portfolio for Oct 2026. If work is not too busy, I will try to provide an update where possible.

I explained how I constructed this portfolio in Deconstructing Daedalus Income Portfolio and Why I Currently Invest in These Funds for Daedalus. 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 similar to this in the personal planning notes section.

Portfolio Change Since Last Update

The portfolio was valued at $1.833 million at the end of September and is at $1.851 million at the end of September.

We reported a portfolio change of +0.98% or +$18,000 for October 2026.

The portfolio is valued in SGD because that is the currency that I would most likely be spending on.

As of 3rd November 2026, the portfolio is valued at $1.864 million.

Portfolio Attribution – Why did the portfolio do better/worse compare to last month [or a year ago if this is a December update]?

We all want to know what cause the portfolio to do better or worse. If you have just one fund that covers the MSCI World, or you have a bunch of funds, would you know if it did better or worse?

In this section, I try my best to explain the portfolio performance in my way.

Here are the primary security holding returns for the month-to-date and year-to-date for the funds that I own [the first table] and reference benchmark ETFs [the second table]:

This table shows the fund holdings denoting the month-to-date and year-to-date performance of the funds that I own.

The Major Index ETFs is present to compare the performance. Just to be clear, I do not own the major index ETFs and you should see the Daedalus Income Portfolio Holdings table.

The returns of all funds are in USD. This includes the performance of the Dimensional funds, which I use the returns of the USD share class so that the returns are comparable. I have also listed the major index ETF performance for comparison.

a. General Equity Performance

October was the month the AI trade finally cracked. The S&P 500 hit a record on 6 October and then slid about 3% to end the month down roughly 1%. The damage was concentrated in technology. The US tech sector fund XLK fell 8.3%, its worst month since September 2022. Weak results and soft guidance from Google, Amazon and Intel made investors ask a hard question: will all this AI spending actually pay off? On the last trading day Intel fell 28% and the US chip index fell 7% in one session.

What is interesting is what happened underneath. Health care, financials, consumer staples and energy all rose, and this cushioned most of the tech losses. Energy stocks gained about 14% as oil stayed high. Brent crude oil ended the month above $113 after a tanker hit mines in the Strait of Hormuz. So the average stock did better than the index this month, which is the opposite of what we saw in September. Money did not leave the market. It moved from companies that are spending cash today to companies that are making cash today.

Interest rates gave investors some relief. The Fed kept its rate at 3.75% to 4.00% on 28 October, but two officials voted for another hike, and the market now puts roughly a three in four chance on a December hike. Even so, bond yields fell. The US 10 year yield touched 5.31% on 5 October, the highest since 2002, then dropped to 4.94% by month end as investors looked for safety. Lower yields helped smaller companies, and US small caps recovered in the second half of the month.

Emerging markets were hit the hardest. The MSCI Emerging Markets index fell about 8%. Korea fell about 17% and Taiwan about 6%, because these markets are full of chip companies and foreign investors sold in record amounts. Japan’s Nikkei was down about 7% by the third week of the month for the same reason. Indonesia had its worst month in 18 years. Brazil fell about 12% after President Lula won another term, as investors worry about more government spending. India was the odd one out, roughly flat, because it has very little AI exposure.

Europe was a quiet winner. The STOXX 600 had its best month since June, helped by having far fewer tech companies than the US. Gold fell to a one year low, which surprised many people given the war and inflation, but with US bonds paying close to 5%, gold has a lot of competition.

For a Singapore investor, the US dollar strengthened a little, about 0.4% against the Singapore dollar, which gave US dollar funds a small lift. A plain global index fund lost around 1% to 2% in October. Portfolios that tilt toward smaller and cheaper companies, like mine, mostly did better, as long as they did not hold too much of Asia.

b. Developed Equity Performance

There were a few multifactor funds targeting the developed equities region in Daedalus:

I hope you look at them as a diversified group of equities that gives exposure to developed large cap and mid cap global equities. They also systematically gives exposure to cheaper and more profitable companies with a little bit of short term momentum.

My developed world funds had a mixed month, but the order was the reverse of September. IWDA, which tracks the MSCI World, lost 1.34%. JPGL was my best fund, up 3.24%, and GGRA gained 0.47%. AVGC lost 0.79% and IFSW was the weakest, down 2.40%. Dimensional Global Core Equity, which I do not own, gained 0.61%.

This makes sense when tech falls hard. JPGL spreads its money more evenly across value, quality and momentum stocks and holds far less of the mega cap tech names, so it did well when money rotated to health care, financials and energy. IFSW likely held more of the chip and tech names that had done well this year, since momentum tends to follow the winners, and those were the stocks that fell. In September it was the other way around.

Year to date, JPGL (14.61%), IFSW (14.02%) and AVGC (13.77%) are all well ahead of IWDA (10.37%), by about 3.5% to 4%. GGRA at 6.32% is still the laggard of the group. It had a decent month, but it remains the fund I keep an eye on.

c. Developed + Emerging Markets Equity Performance

The Dimensional World Equity sits as part of my SRS account. It is a single fund that gives exposure to the developed and emerging markets large cap and mid cap stocks.

You should compare this against the MSCI All Country World and MSCI All Country World IMI.

Dimensional World Equity was roughly flat in October, down 0.18%. ACWD, the large and mid cap all country index, lost 2.24%, and IMID, which adds small caps, lost 2.00%.

Dimensional tilts toward smaller and cheaper companies and holds less of the very large tech names. In a month when big tech and Asian chip stocks fell, that tilt protected it. It still has emerging markets inside, which is why it did a little worse than Dimensional Global Core Equity (up 0.61%), which only owns developed markets.

Year to date, Dimensional World Equity is up 13.56% against 10.52% for ACWD and 11.03% for IMID. Last month the lead was less than 1%. Now it is about 3%.

d. Emerging Markets Equity Performance

AVEM and EMSD is my emerging market exposure. One is a large, mid and small cap fund that should tilt towards value and profitability. The other is a pure emerging market small cap with no factor tilts.

This was a very poor month for emerging markets. AVEM lost 8.33%, slightly better than EIMI which lost 8.87%. EMSD, my emerging market small cap fund, lost 8.28%.

Korea and Taiwan make up a large part of these funds, and both were hit hard by the chip selloff and record foreign selling. AVEM did a little better than EIMI because it holds less of the very largest chip stocks. EMSD did not escape either. Smaller companies in Korea and Taiwan are often suppliers in the same chip chain, and EMSD also holds Brazil and Indonesia, which both had a bad month.

Year to date, emerging markets went from the strongest part of my portfolio to the middle of the pack in one month. AVEM is up 10.07% against EIMI at 10.68%. EMSD is only up 2.15%, and is the weakest fund I own this year. It is a small position, so the impact on the whole portfolio is limited.

e. Small Cap Equity Performance.

About 32% of the portfolio or 36.5% of the equity allocation is invested in Global Small Cap Value or Value-weighted funds. You should look at Dimensional Global Targeted Value, AVGS. USSC used to be a significant allocation but no more. I still leave the performance in for this year just so you can contextualize its performance.

Small caps had a good month, a nice change after September. Dimensional Global Targeted Value gained 4.21% and AVGS gained 1.75%. EMSD was the exception, down 8.28% for the reasons I covered in the emerging markets section.

International small cap value dragged as the small cap materials company did not do as well as the US companies.

US small value led the way. USSC, which I do not own, gained 4.22% and the S&P 600 (USML) gained 2.48%. The Russell 2000 (R2US) was roughly flat at minus 0.23%, because it holds more growth and loss making companies than the S&P 600, which only admits profitable firms. Global Targeted Value has a large weight in US small value, so it moved like USSC. AVGS held up less well because it also owns small caps in Japan and Asia, which fell. It still beat the world small cap index WSML, which lost 0.18%.

Year to date, AVGS is the standout of my whole portfolio at 20.04%, well ahead of WSML (12.12%), R2US (13.13%) and USML (16.19%). Global Targeted Value has recovered to 14.43%. Mid caps (SPY4) are up 10.25%.

f. Global Aggregate Bond Performance

11.5% of the portfolio is in iShares Core Global Aggregate Bond UCITS ETF (AGGU).

The chart below is the US government yield curve at 30th September (light blue) and 30th October (dark blue):

After a poor September, bonds bounced back. AGGU, my global aggregate bond fund, gained 1.52% and is now almost back to break even for the year at minus 0.14%. ERNA, the ultrashort US dollar bond fund, gained 0.48% and is up 3.18% year to date.

The US yield curve moved down by a large amount in one month, but only from the 1 year mark onward.

• Yields from 2 to 30 years fell by 0.32% to 0.39%.
• The 2 year fell 0.32% to 4.56%, the 5 year fell 0.38% to 4.71%,
• the 10 year fell 0.35% to 4.94%
• and the 30 year fell 0.33% to 5.31%.
• Bills of 3 months and below barely moved and still pay around 4.1% to 4.2%, because the Fed did not change rates.

The shape of the curve did not change much. The gap between the 10 year and the 2 year is 0.38%, close to last month’s 0.41%, so the curve still slopes upward. The 10 year went above 5.3% early in the month before falling back. When yields fall, bond prices rise, which is why AGGU recovered. With a December hike still possible, I expect bonds to stay volatile.

g. Currency Effect

The US dollar strengthened slightly against the Singapore dollar in October. USD/SGD started the month around 1.273 and ended around 1.278, a rise of about 0.4%.

Most of the move came in the last week. The US dollar was strongest around 1.281 on 28 October, when the Fed held rates but two officials voted for a hike, before easing slightly by month end.

Since most of my funds are in US dollars and my portfolio is measured in Singapore dollars, a stronger US dollar gave my returns a small lift of about 0.4%. It is not a big factor this month. Different sources show month end rates that differ by a few pips, so the exact figure may be a little different at your broker.

Role of Portfolio

I am building Daedalus to provide inflation-adjusted income that last: from today (age 45) for the rest of your life — potentially forever.

Daedalus is to provide for my essential and basic living expenses.

I am currently not drawing down on Daedalus.

I sized Daedalus versus the starting income that I can withdraw with the Safe Withdrawal Rate (SWR) framework. The SWR framework is the best way to create a perpetual inflation adjusted income stream that survives some of the most challenging 30-year, 50-year, 70-year income sequences.

You can read more about the spending I design Daedalus for and the SWR:

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

I will explain more about the income plan below.

Based on current portfolio value, the amount of monthly passive income that can be conservatively generated from the portfolio is

The goal of the portfolio is to generate steady, inflation-adjusted income to cover my essential living expenses. It’s built using a conservative initial withdrawal rate of 2.0–2.5%, which is designed to hold up even under extremely tough market conditions — including scenarios like the Great Depression, prolonged periods of high inflation (averaging 5.5–6% over 30 years), or major global conflicts. In other words, it’s stress-tested to withstand some of the worst financial environments in history.

Many did not realize inflation is not 3%, 3%, 3%, 3% every year but it will look like a sequence like such on top. Some of the toughest sequences that kills an income portfolio is not a 30% portfolio fall but persistently high inflation.

You will lose purchasing power, not just run out of money with a poorly design income portfolio.

If I want to preserve my purchasing power, then I need an income strategy to provide me an income that adjust for inflation in this way AND for the portfolio to last for a long time. This is why I rely on the Safe Withdrawal Rate (SWR) framework, which is a framework to size our portfolio capital to conservatively provide income even in high inflation sequences.

Here is a visual illustration of how the income stream will be based on the current portfolio value:

If I start withdrawing income based on a 2% SWR, or 2.5% SWR, my income progression will adjust based on last-year’s inflation rate. This allows me to preserve my purchasing power.

This hypothetical inflation sequence is challenging, and in year 15 the income is vastly higher than the start.

If your portfolio is lesser, or more, your starting income is different. You do not have to follow how conservative my initial withdrawal rate is. Even a 3% initial safe withdrawal rate is pretty conservative.

Amount of Cash Flow/Income Withdrawn/Extracted from Daedalus Income Portfolio

I wish to be fully transparent about the schedule of withdrawals from the portfolio because if the goal of the portfolio is eventually or currently provide income for spending, you would be interested to know how much is taken out from the portfolio.

There have not been any withdrawals or cash flow extraction for spending since the publication of the portfolio. I will update as and when it happens.

Capital Injected Into Daedalus

My goal for Daedalus is not to inject capital into the portfolio since its first report in May 2024. One of the reason is to show a portfolio that is buy-and-hold, instead of some weird “war chest market timing” strategy.

Usually the injection is if I have SRS commitments to reduce the tax expense.

Here are my historical Capital Injections to the portfolio:

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 no portfolio changes for the month.

Current Holdings – By Dollar Value and Percentages

The following table shows more details about the securities that I currently held.

The securities are grouped based on general strategy, whether they are:

1. Systematic Passive Fixed Income to reduce volatility.
2. Systematic Passive, which are equities that tries to capture the market risk in a systematic manner.
3. Systematic Active, which are equities that tries to capture various proven risk premiums such as value, momentum, quality, high profitability, and size in a systematic manner.
4. Hard Assets, securities that are more commodities related, that tends to do well in commodities related inflation situations.
5. Legacy Tracking Positions, securities that I still keep around, minimized to track their historical performance.

Portfolio Grouped by Account Money Source Location

Generally, you won’t have just one view about the securities in your portfolio.

In the following sections, I show my portfolio when viewed from different angles.

The first is the portfolio based on location.

1. Cash means held in accounts that we can make independent choices of which platform that we choose to invest in, when we decide to buy, when we decide to sell without any liquidity, tax, or locking considerations.
2. SRS Account is a Singapore-related retirement account. There are tax advantages on your ordinary working income if a person contributes to it. You can defer the income tax until after your retirement, where only 50% of your withdrawal then will be tax, at the prevailing tax bracket then.

This view does nothing much but some might be curious whether it makes up my money in CPF, here or there and so basically these are basically my cash monies and SRS.

Portfolio Grouped by Geographical Region Exposure of Securities

The second view groups the securities based on its geographical exposure.

Returns comes potentially from taking systematic risks and risks comes partly from the macro, interest and inflation exposure in different geographical regions.

The general regions:

1. Developed Markets – Strategies that systematically considers the large-cap and mid-cap equities in developed countries. You can view the countries, and sector composition at this MSCI World Index page.
2. Global – Strategies that systematically considers the large-cap, mid-cap, small-cap equities in both developed and emerging market countries. You can view the countries, and sector composition at this MSCI Emerging Markets IMI Index page.
3. US – Strategies that mainly tap small-cap US equities.

Portfolio Grouped by Fund, Cash or Individual Security

The third view groups the securities based on whether they are fund, cash or individual securities.

Almost 100% of the portfolio is implemented with funds. Funds can be:

1. Singapore Unit Trusts domiciled in Ireland.
2. London Stock Exchange listed exchange traded funds (ETFs) domiciled in Ireland.

Portfolio Grouped by Investment Strategy.

The last view groups the securities based on commonly known high level strategy names.

What Systematic Active Means: Funds that help me execute passively very specific, repeatable underlying securities selection on an ongoing basis. Here are some examples of the systematic active strategies in my portfolio:

1. Global Multifactor: From a basket of 1,600 developed market large and mid-cap stocks, rank the stocks by their value, by their 12-month momentum, by their degree of ROE and debt to asset, and then own the top 300. Do this every half-yearly or quarterly. You end up with a strategy that consistently owns 300 companies that are cheaper, quality and have greater momentum relative to a market cap weighted index.
2. Small Cap Value: From a basket of 3,000 developed market small cap stocks, rank the stocks based on price-to-book value (include intangibles in the book value). Also rank the stocks by operating earnings minus interest divide by book value. Eliminate the companies with low profitability. What we end up is two group of small cap stocks: The more profitable small caps but not too expensive, and the small caps stocks that are at least profitable but are very cheap. Own the top 30-35% of this cohort consistently. Have a manager that consistently helps me execute this.

In contrast, Systematic Passive are funds that help me track certain benchmark indexes. These indexes can be market-cap weighted, or equal-weighted, and reconstituted periodically so that they mirror the performance of benchmark indexes.

Hard Assets are the funds that provide exposure to energy-related securities.

Systematic Passive Fixed Income main helps damp the volatility of the portfolio. They are maintain based on the historical research that it is better to be less than 100% in equities if your portfolio is meant for income.

The fixed income/cash should not be viewed as a war chest to rebalanced to equity or take profit from equity. This is a strategic long term allocation whose main purpose is to optimized negative sequence of return risks.

The Main Custodians for the Securities in this Portfolio

The current custodians are:

1. Cash: Interactive Brokers LLC (not SG)
2. SRS: Philips FAME

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.

Kyith is the Owner and Sole Writer behind Investment Moats. Readers tune in to Investment Moats to learn and build stronger, firmer wealth foundations, how to have a Passive investment strategy, know more about investing in REITs and the nuts and bolts of Active Investing.

Readers also follow Kyith to learn how to plan well for Financial Security and Financial Independence.

Kyith worked as an IT operations engineer from 2004 to 2019. Currently, he works as a Senior Solutions Specialist in Fee-only Wealth Advisory Firm Providend. All opinions on Investment Moats are his own and does not represent the views of Providend.

You can view Kyith’s current portfolio here, which uses his Free Google Stock Portfolio Tracker.

His investment broker of choice is Interactive Brokers, which allows him to invest in securities from different exchanges all over the world, at very low commission rates, without custodian fees, near spot currency rates.

You can read more about Kyith here.

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