SHARPE INCOME … Now on Cruise Control

Posted on Dec 12 2016 - 3:52pm 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.


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: $3,199.13
Total Sharpe Income YTD Return: + 7.69 %
Sharpe Income YTD Paid Yield on Cost: + 2.47 %
Total Sharpe Income YTD Maximum Draw-down: – 6.84 %
iShares Barclay’s IEF Return: + 0.30 %
S&P 500 Index YTD Return: + 10.55 %
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.

And there was the beginning of the slew of dividends that we will enjoy this month.  We were paid our Microsoft (MSFT) dividend on December 8th.  We were also paid our International Business Machines (IBM) dividend on December 10th.  Both of these dividends have been recorded on the PDF, as well as the spreadsheet associated with this project.  Our Union Pacific (UNP) dividend will be paid on December 29th.

After that, I am keeping my eye on “Income Asset #3” for our basket.  It’s still not ready for a purchase.  At the time of this writing, the annual yield is around 5.94%.  I am also waiting for a buy-in on TLT or SHY.  But neither of those instruments are ready for a purchase either.

In the past, I have used the metaphor of “building a house” to describe the maturing process of this project.  First, we laid the foundation.  Then, the sill-plate.  At this point, I would say we are still ‘framing the walls’.  At the present time, the “second wall is being framed”, as it were.  But this metaphor describes how ‘mature’ the project is; insofar as how long it will take to derive monthly income from the project.

However at the same time we’ve now developed the project far enough along, that I view it on a type of ‘cruise control’.  In other words, while we keep the exact process specifics with clients of our Short-Term Trading Course … at the same time the exact mechanics really are not going to change.  Capital will be incoming from our deposits.  We will drive the “Capital Gains Strategy” forward and when we have big gains there, we will share those gains with the “Income Assets” category.  We collect our dividends, and purchase more of these instruments when it is time to do so.

In effect, we are on cruise control.  Cruise control that has returned us 7.69% thusfar for the year, and 12.57% on the Income Assets for the year.  But cruise control nonetheless.  You’ve seen the mechanics of what it is we will be doing. All that’s left to do from this point forward, is drive it forward

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

1 Comment so far. Feel free to join this conversation.

  1. mappy December 13, 2016 at 10:27 am - Reply

    Quick morning. Bought JDST, $36.95. Sold $38.06. Gold gonna get hammered soon.

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