SHARPE INCOME … Why Not Just Use ETF’s for Income?

Posted on Dec 7 2015 - 9:05am by Dan

The original Sharpe Income post that explains this project can be found here.

The Sharpe Income category be found by clicking on that red ‘Sharpe Income’ tag next to this post title, or by clicking here.

We continue the discussion from the last entry.


First, a bit of house-keeping …

We began this project with $500.  All in an effort to help out the small retail investor understand the importance of growing an income account, as opposed to a trading account.  The following numbers  are taken from our PDF that is attached below.  Remember that the numbers are computed off of Friday’s close … 

Sharpe Income Balance:  $1,685.05
Sharpe Income YTD Return: – 6.39 %
Sharpe Income YTD Yield:  +1.15 %
Sharpe Income Maximum Draw-down: – 13.05 %
IEF Benchmark Return: +1.50 %
S&P 500 Index Return: +1.59 %
Berkshire Hathaway Return (BRK.A): – 9.51 %

For the purposes of this particular project, this week I once again moved 92% of this weeks capital contribution towards the category reserved for purchasing capital gains assets.  The remaining 8% of the capital contribution was placed towards the cash we have reserved to in the form of ‘dry powder’.  Simply put, cash we hold that we can place anywhere, at any time for the purposes of the project.

The PCY dividend was paid and counted this past week.  At the same time, the TLT dividend was paid, and counted in with our results. 

Now that we are done with the maintenance of the account for this week …

A question could arise, as we discuss using assets in the markets, for income.  Could you use simply ETF’s for income?  Why do I use stocks for income instead of ETF’s, or say, bonds?

We discuss that in the following video entry …

The link to the Google Drive Spreadsheet that you can view, that we will edit, build upon and refer to over time can be found at this link.

We continue the Sharpe Income project with this next entry.

The Sharpe Income PDF breakdown for Week 54 can be found here (numbers computed off of Friday’s close) …

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