The stock market is now into the sixth year of a cyclical bull market that started March of 2009, rarely do bull markets last more than five years. Additionally, one of the main catalysts for the market has been the Federal Reserve’s quantitative easing, which if all goes as plan will end in 2014. Our view, of both the stock market and the bond market is they both have considerable risk, and this systemic risk or market risk needs to be managed. This is an unusual period where the three major asset classes, stocks, bonds, and cash are not attractive. As a result we believe it is imperative to use tactical managers rather than traditional managers that benchmark against stock or bond indices. We also believe the selection of a tactical manager that can protect against bear markets is imperative. It is critical to understand that our strategy is named Loss Averse for a reason, which we believe differentiates us from other tactical managers that do not focus as much on asset protection. In our view, it is not acceptable to have a greater than a 10% drawdown in any market environment.

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PVG – Equity Income Monthly Update (April 2014)