A quick glimpse at the classic Mosaic ETF model shows how market neutral thinking can truly buffer downside risks while still providing an opportunity to pick up some gains when, and if, the market turns back up. Keep in mind the ETF allocations have basically been fixed for the past 4 years….the life of the model.
While the markets appear to be uber oversold the sad reality is there are limits to what technical analysis can forecast and in the present environment of world economic slowdown it is fundamentals, or the perception of them, that rule market momentum. This is a duck and cover trading environment and no time to be frisky betting large on mean reversion strategies. Eventually some news item will pop up that gets the market optimistic…but for right now it’s spooked.