The strategy seeks an attractive absolute return for investors by capturing a significant portion of rising stock and bond market returns while minimizing losses during falling markets. The portfolio is invested in individual stocks that represent broad economic, industry, and geographic sectors of U.S. and international markets.
Portfolio management and security selection encompasses both fundamental and technical analysis. Our process includes identifying the securities of companies that can grow sales and earnings at above average rates, and judgments about whether those securities are under or overvalued relative to market conditions. These include those with longer-term return potential because of economic and technological change, new product and service development, market or geographic expansion, or structural change that unlocks shareholder value. Macro-economic and market trends are also studied to help with the timing of purchases.
PVG reduces undiversifiable market volatility and risk by hedging portfolios with inverse market index securities, stop losses and cash positions. Hedging tactics are utilized to reduce overall volatility of the portfolio, and may also result in minimizing losses that may occur in an unfavorable cyclical or secular market.
Individual security risk is also managed by PVG. While PVG extensively researches all securities included in Equity Income portfolios, changing fundamental and market conditions, periodically requires the sale and replacement of portfolio securities. Others are sold if they rise to excessive valuations.