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 …
Sharpe Income Balance: $1,973.88
Sharpe Income YTD Return: – 1.35 %
Sharpe Income YTD Yield: +0.05 %
Sharpe Income YTD Maximum Draw-down: – 6.84 %
iShares Barclay’s IEF Return: +3.60 %
S&P 500 Index YTD Return: – 2.15 %
We received a dividend last week, in the form of PCY. That has been noted, and recorded.
When it comes to having capital to deploy, we are now ‘out of the hole’, that we mentioned in previous entries. We applied the remainder of this weeks capital contribution to purchasing Medtronic (MDT), as you can see from the Cash Allocations on the PDF …
At this point, we have four income producing assets in this project. We also have a small ‘capital gains’ strategy embedded within the account, that can work to ‘boost’ the account as well. So in the past, we stated that we felt that we had ‘laid and poured the foundation’ of this project, metaphorically speaking.
So from this point forward, we will probably divide future capital contributions between the two strategies; the income producing assets, and the capital gains assets. To continue using the above metaphor, we could say that we are beginning to bolt down the “sill plate”.
In other words, we had the foundation of some income assets, and a secondary strategy to support the main purpose. And we are now only just building upon that foundation. We will continue capital deposits towards both strategies, and work on building this project forward.
Now last week, we talked about ‘risk’ instruments, and letting this rally proceed for our ‘capital gains assets’. This has worked out in our benefit thus far …
Last week I stated I was bullish. And that has worked out well.
Now? Now I’m just watching. Observing.
I have no idea what the market is going to do, and neither does anyone else. We’ll just have to see how far they can run. If they continue to run higher? Then we will simply allow them to do so. If our processes (we keep those processes private with clients of ‘The Sharpe Report’) says this rally may be over? We could re-balance the entire capital gains strategy section by selling everything, and going to cash. And then, observe the markets, and begin again.
We’ll have to watch, wait, and observe to see what scenario the market presents to us.
In the meantime, we’re going to continue to work at lifting the building …
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.