Here are some regulatory notes before we get started. Solimar Fund is a Rule 506(c) of Regulation D fund and only available to verified accredited investors. All fund returns are net of fees and expenses, unaudited, as reported by NAV Fund Services. Individual results may vary. Past performance is not necessarily indicative of future results.

Solimar Fund returned 0.3% in August after fees. The SPY closed the month up 2.7%.

There is no single way to understand or trade a market.

Depending on the time horizon, the same market can be rising, falling, trending, mean-reverting, calm, or volatile, sometimes all at once.

That is one of the ideas at the heart of Solimar's multi-strategy approach.

Rather than relying on one model of how markets "should" behave, we look at them through multiple lenses and timeframes. Each of our strategies is designed to identify and capitalize on a different type of market behavior. Over the next several newsletters, we're going to take a closer look at those lenses, how they differ, and why we believe combining them gives us an edge.

If you’ve been following along with us, you will have noticed we print different results each month whether the market is up or down. Even when we “underperform” the market, that can be a good thing.

Let us explain why. (Sneak peek, a smoother ride from bottom left to top right of the P&L curve that outperforms the market over 3 to 5 years.)

We’ll start with medium-term swing trading.

At one end of the investing spectrum is long-term investing: buy an asset and hold it through the inevitable ups and downs.

At the other is short-term trading: trying to capitalize on movements that may last hours, minutes, or even seconds.

Medium-term swing trading occupies the space between them.

These models are generally interested in market movements that develop over days to weeks. Long enough for meaningful trends and behavioral patterns to emerge, but short enough for the portfolio to adapt as conditions change.

The goal isn't to predict where the market will be six months from now.

It's to continually ask a simpler question: What is the market telling us right now, and how much exposure does the current environment justify?

Markets rarely travel in straight lines.

They advance, retreat, consolidate, accelerate, reverse, and begin again. Those movements are influenced by fundamentals, investor positioning, changing expectations, risk appetite, and human behavior manifested through fear and greed.

Our medium-term models are designed to systematically identify those shifts and adjust exposure accordingly, and capitalize on the intermediate market direction.

When conditions are favorable, the system can increase participation. When conditions deteriorate, it can reduce exposure, or position for declining markets. And when signals are mixed, it can simply wait.

Importantly, none of those decisions are discretionary. All trades are fully automated based on over 50 yrs of data and market trends, tilting the odds in our favor.

At Solimar Fund, there isn't a portfolio manager looking at a chart and deciding that the market "feels" overextended. The same quantitative rules evaluate the market every day, determine the appropriate positioning, and execute accordingly.

Medium-term swing trading can be powerful, but it has environments in which it struggles as does every market model.

Strong, persistent moves can provide attractive opportunities. Choppy markets can produce false starts and reversals. Sometimes markets move too quickly for a medium-term signal to capture the entire move.

That's not a flaw unique to swing trading. It's a characteristic of every investment strategy.

Every strategy sees the market through a particular lens, and every lens sees some environments better than others. And for the last year or so, medium term swing trading has been out of favor.

That is precisely why Solimar isn't built around a single strategy.

Over the coming weeks, we'll introduce several of the other lenses within our system and eventually bring them together to explain why we believe a diversified, multi-strategy approach provides a more durable way to navigate markets over time.

Next week: Momentum, and why markets have a tendency to keep moving.

Fall has historically had a reputation for bringing a little more turbulence to markets. Whether that arrives this year is anyone's guess, but uncertainty around rates, inflation, economic growth, and geopolitics gives markets plenty to digest in the months ahead.

For us, the answer isn't to predict what comes next. It's to be ready for it.

Our algorithms will continue to evaluate the market each day, following the signals, adjusting exposure, and responding systematically as conditions change. If volatility picks up, our job isn't to anticipate every turn. It's to let the system respond to what the market actually gives us.

All we do every day is attempt to tilt the odds slightly in our favor.

That's the beauty of systematic trading. We don't need to know what the fall will bring. We need to trust the process that has served us so well since October 2023.

Enjoy the ride.
Geoffrey & Tyler

_{2by2 Capital LLC | [email protected] | www.2by2Capital.com}