SHARPE INCOME … Yield Stability

Posted on Jan 5 2015 - 2:15am by Sharpe Trade

The original Sharpe Income post can be found here.

The Sharpe Income category be be found by clicking on that red ‘Sharpe Income’ tag next to this post title, or by clicking here.

Remember that $25.00 has been added to the Sharpe Income, Fixed Income account this week, per the rules of this account as mentioned in the original post.  You will also be able to note this on the PDF at the bottom of this post.

We continue the “Shape Income” discussion from the last entry.

So … we only have one instrument in the account at this time, and some cash.  And we look at that one instrument, and we find that we have an annual yield on IBM, at the moment, with the current price, of $162.05, that the dividends on that $162.05 would mean a dividend yield of 2.72%.  That means if you bought at Friday’s close of $162.05, then for that cost you could enjoy annual dividends of 2.72% (yield on cost is illustrated there).

But that price will move around.

The price of IBM may move below $162.00.  It may move higher. It may move lower.  My thoughts on  the price movement, are such that they are important to know, but I try to view things through the lens of our previous conversation on “Mr. Market”.

But how can we tell?  How can we tell if it is a “temporary ‘Mr. Market freakout” and an actual honest to goodness problem?  How can we tell if the dividend is actually sustainable?  I discuss this in the following video entry …

 

Actionable View of Markets for Sharpe Income

There are no purchases planned at the moment.  So for this week, we have more cash.  We excercise patience, and let that cash pile up.  There are no orders out there for this Sharpe Income account

We continue the Sharpe Income discussion in the next entry

The Sharpe Income PDF breakdown for week 6 can be found here.

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