SHARPE INCOME … “Money Flow” Confused and Drying Up

Posted on Oct 17 2016 - 3:40pm by Sharpe Trade

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.

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: $2,848.48
Total Sharpe Income YTD Return: + 2.62 %
Sharpe Income YTD Paid Yield on Cost: + 2.45 %
Total Sharpe Income YTD Maximum Draw-down: – 6.84 %
iShares Barclay’s IEF Return: + 5.70 %
S&P 500 Index YTD Return: + 4.36 %
S&P 500 Index YTD Maximum Draw-down: – 11.24 %

As you will note in the PDF that is attached below… 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.

I … along with any other industry professional worth his salt … observe how money is ‘flowing’ between markets.  From what market is it flowing, and if there is such an ‘outflow’, then where is flowing ‘to’.

And If I had to encapsulate worldwide ‘money flow’ at the moment, I would say that it is ‘confused’.  And as it is confused … it is ‘drying up a bit’.

Stocks have drifted lower for the seven days.  Gold has fallen over 4.2% in the last few weeks.  So you don’t see money from stocks, flowing into the ‘fear metal’ of Gold.  Bond prices have been solidly hit with the December FOMC on the horizon.  Longer duration bonds in the U.S. are down over 5% since July.  Even short-duration bonds got whacked a bit in the last few months.

One of the few markets that remain in an elevated status?  Is Junk Bonds.  Lower quality credit.  And even there, Junk has only managed to hold onto a ‘plateau’ of prices.  At the same time, the U.S. Dollar Index is rallying. 

So briefly put?  We simply see that for the time being, “money flow” is a bit confused, and drying up a bit.  And a flight to the Dollar has begun.

Stay buckled up.

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 99 can be found here (numbers computed off of Friday’s close) …

2 Comments so far. Feel free to join this conversation.

  1. mappy October 17, 2016 at 4:11 pm - Reply

    was ahead……now not so much. Why do I trade stocks again? Love the DL song! hope all is well with you.

    • Dan October 17, 2016 at 6:16 pm - Reply

      I thought you specifically would like the DF song there.



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