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.
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 …
Total Sharpe Income Balance: $2,061.57
Total Sharpe Income YTD Return: + 1.95 %
Sharpe Income YTD Yield: + 0.30 %
Total Sharpe Income YTD Maximum Draw-down: – 6.84 %
iShares Barclay’s IEF Return: + 3.90 %
S&P 500 Index YTD Return: + 0.28 %
Let’s review …
House-Keeping / Maintenance
Our total balance is rising nicely …
For our Income Assets, we applied 100% of this weeks deposit to the cash reserved to purchase Medtronic (MDT).
And in terms of performance for those Income Assets that we own, they are coming back, and coming back strong …
ONLY The Income Assets Performance
From January 1, 2016 to Date
For our Capital Gains Assets … we liquidated everything last week, or ‘re-balanced’ by going back to cash. We then purchased TLT, PCY, SHY and IVV within this portion of the project.
Sharpe Income Capital Gains Performance
I call each of time-periods that I liquidate, go to cash, and re-balance the assets a ‘cycle’. So we are now within the ‘second cycle’ of this portion of the project.
When you look at this weeks capital contribution … Our cash on hand is reserved thusly …
For our Capital Gains strategy, now that we have bought TLT, PCY, SHY and IVV, we simply have to measure the progress and performance of those assets. We have some cash left over, but I don’t see any opportunities at the moment using the process and style of trading that I am using here. Since those assets were bought with no commissions via the ETF commission free program that many brokers now offer; we must hold them for at least 30 days. Which is fine. Because typically these trade ‘cycles’ can last a few months.
For our Income Assets, we will continue to focus on contributing capital, and purchases that will only increase our dividend income over time.
Out of the seven income assets that I personally use, we have four of them within the project. International Business Machines (IBM), American Express (AXP), Union Pacific (UNP) and Wells Fargo (WFC).
We still have to add Medtronic (MDT), Colgate (CL), and Microsoft (MSFT).
As we add these instruments to this project, our risk-adjusted performance metrics will begin to improve. This is not due to the instruments themselves. So it has nothing to do with Microsoft (MSFT) or American Express (AXP). Nothing to do with Union Pacific (UNP). The reason why I believe our risk-adjusted performance metrics will improve as we add ‘Income Assets’ to the project; has to do with the concepts I am putting into place, with in the structure of the project over-all.
So as we add capital from week to week? We can simply observe the performance of the account. We’ve finally reached a point, where we can … metaphorically speaking …. sort of ‘roll down the window’, and “cruise” so to speak. Watch how each piece performs, and watch how their interact with the project as a whole.
Most of investing? Even Fixed Income investing; is simply about exercising patience as you cruise along.
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 …