The original Sharpe Income post 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.
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 cash that we simply have ‘on-hand’ in the form of ‘dry powder’.
We had stated that we were monitoring Union Pacific (UNP) for a possible income purchase, as well as PCY, and TLT for capital gains instruments. We have cash, reserved, and ready to go for purchasing UNP. As I mentioned after I reviewed the company’s 2nd quarter conference call, I believe that Union Pacific (UNP)’s stock has farther to fall. I’m still interested in the company. But any purchases may be delayed until the stock stops falling.
And really, although the purpose of this particular project is growing an income account, my attention has shifted to the assets nestled within this project, for the purposes of capital gains.
For such assets, you already know about JNK. We have that piece purchased, and operating within the account. We’ve already discussed that we will add PCY, and TLT to the mix. There is a fourth ETF that I will use, and put into the basket of ETF’s that I am using for capital gains.
IVV. An ETF that mimics the S&P 500 Index. I use IVV, rather than SPY, because IVV can be purchased for small retail investors through many retail brokers, through a commission free program.
Now that we have the house-keeping out of the way.
I don’t really recall paying someone off.
Because the market we are getting now? Like … right now? Could not be better for the way I have set myself up. I feel like I would have had to pay someone, to get the market we are receiving right now.
My short-term trading has begun to recover from draw-down, and is up something like 120 BPS in the last month or so, and continuing to recover.
Of course, this entry is not about my short-term trading. But my point? Is that I the markets we are now receiving are acting exactly as I would wish them to.
In the short-term, the Sharpe Income Project has taken a small dive in terms of BPS. But only a very small dive …
We have a number of instruments that I am willing to purchase, when the time is right. And most importantly, as those instruments are diving in price, the cash in this project is piling higher.
Union Pacific (UNP): No purchase here. Yet. We have to wait for some sort of bottom to form. ‘Bottoms are a process, they are not a single event’, as the old saying goes. But I already have the cash allocated for an introductory purchase.
Emerging Market ETF (PCY): Again, no purchase here. Yet. We have to wait for a bottom to form up.
20+ Year Government Bonds ETF (TLT): I could buy TLT. But I’d like to wait for a pullback before doing so. I’m going to hold off … just a bit … on TLT
S&P 500 Index ETF (IVV): Dive baby dive. No purchase here yet either. I’d love to buy in. But at the moment? Just let the stock market fall. I couldn’t be happier in fact, that stocks are falling at the moment. Another instrument has been added to the mix, that keeps getting cheaper, as my cash for this project piles higher. Great!
So basically, we have a bunch of ETF’s that I wouldn’t mind buying, and they are getting cheaper. And each week that passes? I have more cash.
It’s like I paid someone off or something.
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.