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 only $500. All in an effort to help out the small retail investor who doesn’t have a lot of money, 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: $3,087.00
Total Sharpe Income YTD Return: + 5.68 %
Sharpe Income YTD Paid Yield on Cost: + 2.45 %
Total Sharpe Income YTD Maximum Draw-down: – 6.84 %
iShares Barclay’s IEF Return: + 0.90 %
S&P 500 Index YTD Return: + 8.29 %
S&P 500 Index YTD Maximum Draw-down: – 11.24 %
So let’s first cover our basic house-keeping. We have placed this weeks ‘capital deposit’ in the category reserved as “dry powder”. Cash that we simply have ‘on hand’ and can move about as we wish. Of that cash, 85% of the capital deposit was placed as reserved for a future deposit towards the ‘capital gains’ strategy. 15% of the capital deposit is placed towards reservations for the purchase of more income assets.
It seems I made a mistake last week. I had stated that that the Sharpe Income project’s Income Assets were up 8.31%.
Make that 9.10% …
If we wished, we could go around singing “Trolololol” about being up 9.10% today.
How would that help us 20 days from now?
What about January 2017? Or April 23rd, 2017?
What does being up +9.10% today, have anything to do with seeing to the future returns of the project?
My point, is try to avoid celebrating too much when you are up well relative to the strategy being implemented. As I like to say, “Volatility of returns, is volatility of returns“. It works both ways. For both positive returns, as well as drawdown. Or “volatility of returns, being volatility of returns.” Positive expectancy is what will keep us profitable in the long run. And I keep to positive expectancy by following the process.
So for today? I’m thinking about two things when it comes to this project …
- I am keeping an eye on “Income Asset #3” as a market. When I believe it’s time to purchase that asset, I will announce it publicly here, at the front page website.
- Continuing to build cash as ‘dry powder’.
Those are the two things I have my mind on.
Remember … “Act like you’ve been here before”.
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.