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.
First, a bit of house-keeping …
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: $1,768.04
Sharpe Income YTD Return: +0.00 %
Sharpe Income YTD Yield: +0.00 %
Sharpe Income YTD Draw-down: +0.00 %
Sharpe Income Inception Return: – 7.96 %
Sharpe Income Inception Draw-down: – 13.05 %
Sharpe Income Inception Yield: + 1.57 %
For the purposes of this particular project, this week I once again moved 92% of this weeks capital contribution towards the category reserved for purchasing capital gains assets. The remaining 8% of the capital contribution was placed towards the cash we have reserved to in the form of ‘dry powder’. Simply put, cash we hold that we can place anywhere, at any time for the purposes of the project.
We also received a host of dividends. They were all applied to the category reserved for purchasing capital gains assets.
Now that we are done with the maintenance of the account for this week …
We are starting off 2016 with a bang.
With news out of China at the time of this writing, the Spoos is down around -2.59%. Quite naturally, I told clients this morning that viewing the markets through a 3 to 15 day periodicity, I am bearish on the equity markets.
Now pay careful attention, because the benefits of our approach for this project is beginning to bear fruit.
The markets are down, as we said, around -2.59%. However, our capital gains strategy, is only down about -0.80%. It’s too early to see the complete results of our approach. This project is still far too young. But at the moment, our nested ‘Capital Gains’ strategy has a 1.79% advantage over the market. If the market continues to sink? I would expect our advantage to increase.
Which, may I add, also softens the blow to our Income paying assets, which are also experiencing some draw-down.
And at the same time, we are experiencing nominal growth in the account through dividends, and through capital contributions.
So am I concerned? Am I in a panic over the state of the stock market?
Not in the slightest.
If anything, I’m rather encouraged by what I see ….
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.