SHARPE INCOME … Now What?

Posted on Feb 22 2016 - 11:28am 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 $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: $1,870.52
Sharpe Income YTD Return: – 4.97 %
Sharpe Income YTD Yield: +0.05 %
Sharpe Income YTD Maximum Draw-down: – 6.84 %
iShares Barclay’s IEF Return: +4.80 %
S&P 500 Index YTD Return: – 6.17 %

We have been building cash to buy another income asset for this project.  We did not quite have the ~$300.00 to purchase Wells Fargo (WFC).

So we drove the cash a little past red-line, and bought it anyways.

This put us in the hole a little bit.  We naturally applied this weeks capital contribution to that hole, as you can see from the Cash Allocations on the PDF …

02-22-16-cash-allocations-free-dividend-project-sharpe-trade

So the very first task before us, is to complete filling in that negative amount.  With one dividend payment and next weeks capital contribution, we’ll have accomplished that task.

Then what?

As far as our capital contributions, we will continue to apply the majority of those deposits towards purchasing income assets.  As we have already bought International Business Machines (IBM), American Express (AXP), Union Pacific (UNP) and Wells Fargo (WFC), that leaves Medtronic (MDT), Colgate (CL), and Microsoft (MSFT) to pick up.

Next, we have our Capital Gains strategy that we are running within this project.  We have dumped out of TLT after it’s rise, and still hold IVV, QQQ, PCY and JNK.  At this point, we have a nice advantage over the market looking at the strategy 2016 YTD …

02-22-16-sharpe-trade-capital-gains-strategy-best-dividend-income

As well, as since we began that picking up these ETF”s in 2015 …

02-22-16-sharpe-trade-capital-gains-strategy-best-dividend-income-since-2015

The job here, is to monitor our positions.  I think the long end has seen as much action as it’s going to see, so we dumped out of TLT.  It looks like risk is taking a ‘bite’ today, so let’s see if risk continues run.  Which should benefit the strategy, as we are left with ETF’s that are exposed to a variety of assets along the risk spectrum …

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

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