This is week 2 of the Mosaic series. Above is a price comparison of last week’s basket of ETFs and the Mosaic model over 5 years. As mentioned, my goal is the maintenance of a linear equity curve and the difference between the 6 major market components and the model is quickly evident. Mosaic derives from my personal frustration with market volatility driven by utterly unpredictable news events and widespread price manipulation by a variety of large players whom the SEC has yet to sanction. These factors make it increasingly problematic to forecast short term directional moves and Mosaic is my tactical response to this dilemma…it is a refined non-directional trading system. Some details of how the model is constructed will remain proprietary but the basic concepts will be clear.
The Mosaic models are adaptive in their design and simple to execute. Average trading frequency is bi-weekly or longer….sometimes monthly…Mosaic is a turtle, not a rabbit. Mosaic trades only 9 ETFs and 1 stock..GE…so the total universe of our attention is limited to only 10 symbols. Mosaic is the next step in the refinement of the Lazy Man model and it’s a big one. The models trade Long only but utilize inverse ETFs to create a hedge balance. The option strategies integral to the models are level 0 and/or 1. Mosaic trading tactics are permitted in IRA accounts and are designed to deliver a very low risk revenue stream.
