Yield Makes a Difference

One of the metrics that Mosaic models focus on is distribution yield, or the dividend payouts either monthly (most bond ETFs) or quarterly (most stock based ETFs).  As uncertainty in the market rises the common investor behavior is to gravitate towards the higher yield instruments (typically bonds).  The caveat is that some of these bond funds have demonstrated ugly reversal patterns when rallies develop so some due diligence is necessary before picking longer term risk offsets to the equity side of the equation.
The GE yield surprises many investors and is an attractive feature for longer term investors.  On the shorter term GE has an ATR8 of $ .41 or a daily 2% range averaged over 8 days.  That's pretty volatile and also surprisingly consistent.  GE typically trades 25% more volume than QQQ on a daily basis and I've mentioned before the emphasis that several prop trading shops focus on it. Making GE work effectively as part of a Mosaic model is a work in progress.
Next month we look at a couple "off the wall"  Mosaic models that contain GE and a few other surprise stocks in lieu of ETFs just to see some options for offsetting risk while still delivering a respectable capital appreciation.