We think our Loss Averse Equity Income strategy is coming into favor as our expected 5% dividend yield is substantially higher than yields that can be achieved from the bond market globally, and that of the S&P 500. We expect interest rates to increase over time, and have positioned the portfolio into securities that will benefit from rising interest rates. We also have an interest rate hedge in the portfolio. More importantly, the stock market’s fundamentals are becoming increasingly risky. The current valuation when measured by the price to earnings ratio is the highest it has been over the past 10 years at 17.4 times 12 month expected earnings.
Please click below to continue reading: