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. Remember that these numbers are computed off of Friday’s close and are updated each week. It’s live … as it happens …
Total Sharpe Income Balance: $4,146.98
Total Sharpe Income Project Return 2016 Forward: +10.65%
Total Sharpe Income YTD Return: + 3.21 %
Sharpe Income Total Yield: + 4.72 %
Sharpe Income YTD Paid Yield on Cost: + 1.73 %
Total Sharpe Income YTD Maximum Draw-down: – 1.34 %
iShares Barclay’s IEF YTD Return: + 3.70 %
S&P 500 Index YTD Return: + 9.04 %
S&P 500 Index YTD Maximum Draw-down: – 2.61 %
We were paid a dividend in our ‘Trading Segment’, in the form of the TLT dividend since last week’s post. We were also paid our Preferred Shares (PFF) dividend in the ‘Income Segment’; which counts toward the actual ‘income’ of the project. This has all been entered and accounted for on the ‘Diary’ tab of the spreadsheet.
We are ‘shoring up’ our ‘reserve cash’ as of late, and therefore we are going to place 100% of this weeks ‘capital deposit’ in the category for ‘Reserve Cash’. Once again … we are not segmenting the capital to cash for ‘Income Asset’ purchases in the future. We are not segmenting it to cash for future ‘Capital Gains’ Trades. We are simply sticking that capital in ‘Reserve Cash’ … where it will stay.
Thus, the cash is reserved thusly …
Total Cash: $880.32
Income Assets Cash: $110.56
Capital Gains Cash: $520.26
Reserve Cash: $250.00
Cash for Income Assets: $0.00
Cash for Capital Gains Allocation: $0.00
For Simple Reserve Cash: $250.00
As you know from previous entries, we have been concentrating our ‘weekly capital’ contribution, to shoring up the Reserve Cash. And before that, we had spent a few months, on building up the ‘weight’ of the trading segment of the project. And now, we have a project that is more closely ‘weighted’ according to our goals, for the process and methodology that we are using here.
We are more stable and flexible as we head into the future.
That did not come without cost.
In the markets, we call this ‘Opportunity Cost‘. In other words, when you make one decision, you must sacrifice doing something else. Like a baseball player, who sacrifices his own ability to get on base, by making sure that one of his team-mates can advance. All of the time we spent staying flat cash, and waiting several weeks as we built up those segments of the portfolio, was time we were not long these equity markets that seems to just want to rally regardless of any news it receives. Thus, you see the project went ‘flat’ for some time, while we were busy ensuring the future flexibility of the project.
Well … we are almost done ‘shoring up’ the reserve cash of this project.
Once we are complete doing that, we can move on to other aspects of the project we want to concentrate on.
Just remember … every decision, good or bad … that we make in the markets, comes with a cost …
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.
The supplemental information on the forums of the Short-Term Trading Course describes the process behind the Sharpe Income project.
We continue the Sharpe Income project with this next entry.