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Drawdown - Why We Use It

The concept and term of drawdown may be new to many investors but it is an important factor we at Provident use in our analysis of any investment strategy and within the portfolio as a whole. From a risk management perspective drawdown and the mathematics of winning and losing are closely related.

Drawdown is the decline in value from the peak to the trough over a specific time and is usually quoted as a percent. For example, if your investment amount was $100,000 and you lost $50,000 this would represent a 50% loss in value for your investments. Your account equity, the amount remaining, is $50,000 after the drawdown. You will need a gain of $50,000 to bring your investment back to $100,000.

Absolute Investing Overview

Investing with an absolute approach is different than buying and holding. Typically it involves buying and selling investable instruments with a goal of positive returns every year regardless of how a relative benchmark is preforming. Our absolute investing philosophy centers around this concept and our mission is to bring viable strategies and options that seek absolute returns to the individual investor.

At the center of our absolute investment approach is risk management. As market participants we can not influence the returns any given investment will provide, that would require a crystal ball, but we can actively manage the risk our portfolios are subjected to.

Absolute Philosophy

Provident Capital Management is committed to providing the investment community with high-quality absolute return and tactical solutions that are liquid and transparent. We offer an attractive alternative to hedge funds, mutual funds, and traditional buy and hold strategies.

What are Absolute Return Strategies?

"Absolute return funds look to make positive returns whether the overall market is up or down, while index-tracking funds try to beat the index they are tracking."

- Forbes, Investopedia

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Provident Capital's Absolute Indexes are now available on www.morningstar.com for registered Morningstar Direct users.

Easy to Start

Shout if from the mountain tops.

Absolutely!

Provident Capital Management offers a old approach that many have forgotten. Its more than just statistical, asset classes, allocations and high finance. Its about accomplishing your goals and sleeping well at night. At Provident Capital our research focuses on low volatility strategies and portfolios.

The Right Portfolio For You?

What's the right portfolio for you or your clients? Provident Capital offers 4 portfolios that one can select that seek to replicate the risk and return characteristics of our Absolute Indexes.

You can't invest directly in any index, but as the company that created the absolute index we will give everything we have to attempt to match or beat it.

Your new absolute return portfolio awaits you. Start Now...

You've Found the Missing Piece

Financial professionals and individuals alike are moving to an absolute return approach. We believe the days are gone where investors are willing to accept that they are ahead of the game when they only lost 30% and the benchmark lost 35%. There are no guarantees when it comes to investing, but it doesn't mean we shouldn't try to manage risk.

Sometimes its about more than beating the market. Sometimes keeping what you have and seek positive returns in up and down markets. Sometimes its about peace of mind.