Provident Capital Management's (PCM) belief is that superior full-market cycle returns are directly correlated to a reduction or elimination of large drawdowns in any given portfolio or investment strategy. To accomplish this, an investment strategy must employ some form of risk management and should have the ability to capture positive returns in both rising and falling markets. Furthermore, it is important to have the ability to participate in all asset classes, all asset sizes and all asset styles across all markets to insure diversification that is truly non-correlated.
Our firm uses ETF's and stocks to bring to market model driven, quantitative, multi-directional strategies, formerly only available to institutions and accredited investors. These strategies, available in liquid and transparent separate managed accounts, offer investors an attractive alternative to traditional mutual and hedge funds.
Tools and research are available to develop strategies that will deliver respectable performance in today's low return environment. Wall Street's preference for "benchmarking" equity managers to traditional equity indexes exposes institutional investors to excessive risk as measured by draw-downs (up to 30% to 50% over the past 10 and 15 years). Furthermore, recent high correlation across all asset classes, especially in times of financial distress, is minimizing benefits of traditional asset allocation.
PCM offers a solution to losses that are a product of large draw-downs. Provident’s strategies can be used in conjunction with traditional asset allocation approaches or used as a distinctive investment methodology.
Our service is delivered via liquid and transparent separate managed accounts through major custodians such as TD Ameritrade and Schwab. We measure our success by how effective we are at producing positive returns with as little volatility as possible versus comparing our performance to an arbitrary index.