PVG A SSET MANAGEMENT€¦ · Mr. Rick Garcia is President and a portfolio manager for PVG. His leadership role includes management of the sales and marketing division at PVG Asset

LOSS AVERSE INVESTINGP R O T E C T I O N – VA L U E – G R O W T H

P V G A S S E T M A N A G E M E N T

L O S S AV E R S E I N V E S T I N G

ALL TACTICAL ASSET ALLOCATION

L O S S A V E R S E E Q U I T Y I N C O M E - U S C O R P O R A T E F L E X I B L E B O N D - D Y N A M I C C O R E – T A C T I C A L T O T A L R E T U R N

1

PVG PORTFOLIO MANAGEMENT TEAM

Mr. Patrick Adams, CFA, has over 30 years of investment experience with an intense, bottom-up research process to invest both long and short in the U.S. equity markets. Mr.Adams is also the Chief Executive Officer and Lead Portfolio Manager of PVG Asset Management. He is the chair of the investment committee. He has been managing hedge fundssince 1999 and private equity funds since 2005. Prior funds managed at Berger Funds, Kemper, Founders, and Parkstone were all sizable funds and some over $3 billion in size. Mr.Adams has an outstanding long term track record significantly outperforming the S&P 500. Barron’s recognized Mr. Adams as having “All the Right Moves” and “Perfect Timing-because he knows when to get into a stock and when to exit.” Mr. Adams received his MBA from Xavier University and graduated B.S. from the Ohio State University. He has passedrigorous requirements to earn his international professional certification as a Chartered Financial Analyst issued by the CFA Institute.

Patrick Adams – CEO/CIO

Joseph Pecoraro – CCO/Portfolio ManagerMr. Joe Pecoraro, CFA, has been managing money since 1969. Mr. Pecoraro’s career includes experience as a securities analyst with Security Pacific National Bank and the Britishbrokerage firm, Joseph Sebags, in Los Angeles and London. Mr. Pecoraro was a top performing fund manager with the Oppenheimer Funds Group from 1974 through 1981, afterwhich he helped form an investment advisory firm, Alpine Capital Management, which he sold in 1988 to form PVG Asset Management. Mr. Pecoraro developed the Loss AverseInvesting approach during 1998/1999 when he became concerned about the possibility of unfavorable future market conditions and the impact of such conditions on clients. Heearned MS and BA Economics degrees from California State University, Fullerton. He has passed rigorous requirement to earn his international professional certification as a Char-tered Financial Analyst issued by the CFA Institute.

Mr. Rick Garcia is President and a portfolio manager for PVG. His leadership role includes management of the sales and marketing division at PVG Asset Management. Mr. Garcia has been in the financial industry for over 10 years. Prior to joining PVG, he was a Stock Broker for Charles Schwab & Company and a Business Development Consultant with Jackson National Life. Preceding the financial industry, Mr. Garcia served in the United States Marine Corps for 5 years, with overseas deployment during Operation Enduring Freedom (2001) and Operation Iraqi Freedom (2003). He was honorably discharged as a Sergeant in 2003. Mr. Garcia has his Bachelor of Science Finance degree from Metropolitan State University of Denver.

Rick Garcia – President/Portfolio Manager

Mr. Timothy J. McIntosh serves as an Investment Officer for PVG. He oversees all aspects of major client accounts and serves as the lead portfolio manager for the firm's ValueLeaders Long/Short and US Corporate Flexible Bond portfolios. Tim serves on the firm’s investment committee. He also serves as Compliance Officer. He served as a Professor ofFinance at Eckerd College from 1998 to 2008. Mr. McIntosh’s is the author of The Snowball Effect, The Bear Market Survival Guide, The Sector Strategist, and a contributor tothe Comprehensive Financial Planning Strategies for Doctors and Advisors. Tim has a Bachelor of Science Degree in Economics from Florida State University and Masters of BusinessAdministration (M.B.A) degree from the University of Sarasota-Argosy and a Master of Public Health Degree (M.P.H) from the University of South Florida. Tim is a CERTIFIEDFINANCIAL PLANNER™. Tim is an Army veteran, having served active duty in the Army Military Intelligence Unit.

Timothy McIntosh – Portfolio Manager

Mr. Paul MacNamara is a senior market strategist and also provides equity/bond analysis for the firm. He is a member of the firm's investment committee. Paul is the portfoliomanager for the Global Macro Strategy. Paul is a CERTIFIED FINANCIAL PLANNER™. Prior to joining PVG, Paul was CEO for SIPCO Investment Management Company. He also ownedand operated an independent investment advisory firm. He retired from the U.S. Army as a disabled-veteran Lt. Colonel in the Special Forces. He and his wife currently reside inMechanicsburg, PA.

Paul MacNamara – Portfolio Manager

PVG LOSS AVERSE INVESTING SOLUTION SET

25% 25%

30%20%

PVG Tactical Allocation

Dynamic Core Tactical Total Return

Loss Averse Equity Income US Corporate Flexible Bond

30%

30%

10%

30%

Traditional 60/40 Allocation

Growth Stocks Value Stocks

High Yield Bonds Traditonal Bonds

Alternative Tactical Allocation Model

PVG provides time-tested, conservative tactical portfolios that can protect from falling equity markets or falling bond prices due to rising interest rates.

3


MARKET PITFALLS:STOCK MARKET

• The stock market is trading at all-time highs and in general has a high historical P/E Ratio.

• The total market valuation is 32.8% greater than US GDP

BOND MARKET

• The bond market has been on a bull run since the early 80’s or over 35 years and interest rates are at all-time lows across

the global spectrum.

• The Fed will soon be liquidating their balance sheet which will disrupt the bond market

PASSIVE ETF INVESTING

• Passive ETF investing has become the popular trade, however it’s rules based tracking a given index and can expose

investors to wild market fluctuations in volatile markets.

• There is no way to generate any alpha. It’s mathematically impossible.

PVG TACTICAL SOLUTIONS::VALUE INVESTING IN THE STOCK MARKET WITH HEDGING TACTICS

• Value investing, seeking dividend yield, and mitigating risk has been a successful methodology which has outperformed

the stock markets over the long-term. Keep in mind that most balanced funds were down -28% during 2008.

TACTICAL BOND INVESTING

• In order to avoid interest rate risk in the bond market you need to be tactical by using inverse ETFs, or hedge and raise

cash quickly for new issues.

TACTICAL PASSIVE ETF INVESTING

• The tools of index ETFs are a great way to get exposure to the overall market, but having a way to avoid bear markets is

a better way to preserve capital during volatility and participate in the long term uptrend of the markets when it makes

sense. Limiting Beta generates more Alpha.


DYNAMIC CORE

The strategy seeks to capture S&P 500 like returns and avoid significant market losses.

The investments include 3 S&P 500 ETF’s which will be equally invested to an aggregate of

99% of the portfolio when there is a long-only signal.

The strategy employs standby technical indicators to generate trading signals, when the trend

of the market changes to the downside the portfolio goes into a protection mode.

• Beta .45 vs. S&P 500 Since Inception

• S&P 500 exposure with the ability to avoid major bear markets

• Tax Efficient

• -6.16% (Net of Fees) in 2008

• Minimum Investment: $25,000 (UMA Sleeve)

• Minimum Investment: $100,000 (SMA)

LOSS AVERSE EQUITY INCOME

The strategy invests in dividend paying stocks and seeks an annual distributable dividend yield of 4% to

6%.

The strategy utilizes inverse ETFs, stop-losses and cash to protect against volatile markets.

The Loss Averse Equity Income Strategy is suitable for income oriented investors, who also seek

appreciation, but are uncomfortable with substantial stock or bond market risks.


• Outperforms Stock and Bond Market over full market cycle with minimized volatility

• High Dividend Yield of 4% - 6%

• +0.85% (Net of Fees) in 2008



U.S. CORPORATE FLEXIBLE BOND

The strategy invests in fixed income securities (80%) comprised primarily of a combination of investment

grade and higher rated non-investment grade corporate bonds (A, BBB, and BB) by Standard & Poor's.

These bonds generally outperform Treasury bonds over market cycles.

The strategy protects portfolios by utilizing inverse ETFs that may utilize leverage and cash.

• Beta .58 vs. Barclay Aggregate Bond Index Since Inception

• High Yield Corporates with the ability to avoid major interest rate risk

• -10.24% (Net of Fees) in 2008

• Minimum Investment: $100,000 (SMA or UMA Sleeve)

TACTICAL TOTAL RETURN

The strategy seeks to outperform US and International Indexes and avoid significant market losses.

The investments include 4 Index ETF’s (SPY, QQQ, IWM, EFA) which will be invested to an aggregate

of 90% of the portfolio when there is a long-only signal.

The strategy has a 10% sleeve of alpha generating securities which are tactically deployed.

The strategy employs standby technical indicators to generate trading signals. When the trend of the

market indexes change to the downside, the portfolio goes into a protection mode.


• Index exposure with the ability to avoid major bear markets

• Alpha generating stock selection in 10% of Portfolio

• Tax Efficient

• -6.40% (Net of Fees) in 2008



5


Market Cycle Chart

Market Neutral Market Neutral

Mar

ket

Val

ue

vs. P

VG

Val

ue

Time

Long/Short

CURRENT PORTFOLIO RISK SPECTRUM

Risk Averse

Risk Seeking

As of 6/30/2017

Equity Income

Dyn. Core

Tactical Total

Return

Flexible Bond

6

PVG TACTICAL SOLUTION SET

Wealth Preservation

Assuming you invested $1 Million during a bear market, you might sustain substantial losses which take anextremely long time to make up. PVG focuses on preservation of capital during adverse market conditions.

Timing is everything

Period Start ValueS&P 500

DrawdownS&P 500

End ValuePVG

Drawdown*PVG

End Value*

2008 $1,000,000 -37.45% $625,500 -4.93% $950,695

* Investing in the allocation model listed on page 2.

7

PVG LOSS AVERSE EQUITY INCOME STRATEGY

Portfolio Holdings

Position %

Staples Inc. (spls) 4.0

General Electric Co. (ge) 2.0

CVS Health Corp (cvs) 2.0

MACY'S INC (m) 2.0

Pfizer (pfe) 2.0

NUCOR CORP (nue) 1.5

J M SMUCKER CO (sjm) 1.5

General Mills (gis) 1.0

ASTRAZENECA PLC SPON ADR (azn) 1.0

GLAXOSMITHKLINE PLC-ADR (gsk) 1.0

Verizon Communications (vz) 1.0

International Paper (ip) 1.0

Exxon Mobil Corporation (xom) 1.0

Telefonica, S.A. (tef) 1.0

DOLLAR GENERAL CORP (dg) 1.0

Intel Corp (intc) 1.0

HANESBRANDS INC (hbi) 1.0

UNITED PARCEL SERVICE INC (ups) 1.0

WELLS FARGO COMPANY (wfc) 1.0

NETAPP INC (ntap) 1.0

The Dow Chemical Company (dow) 1.0

AMC Entertainment Holdings Inc (amc) 1.0

Merck & Company Inc. (mrk) 0.8

Caterpillar Inc. (cat) 0.5

Total 28.70%

Common Stock Holdings

Position %

Whitestone Reit (wsr) 4.25

CENTURYLINK INC (ctl) 3.5

BP PLC SPONS ADR (bp) 3

WindStream Corp (win) 2.5

CBL & ASSOC PROPERTIES REIT INC (cbl) 2.5

FIFTH STREET FINANCE CORP (fsc) 2.5

ARES CAPITAL CORP (arcc) 1.5

Independence Realty Trust, Inc. (irt) 1.5

New Senior Investment Group Inc. (snr) 1.5

Global Medical REIT, Inc. (gmre) 1.2

Uniti Group Inc. (unit) 1.1

Invesco Mortgage Capital (ivr) 1

CYS INVESTMENTS INC (cys) 1

SELECT INCOME REIT (sir) 1

AT&T, Inc.(t) 1

Arlington Asset Investment (ai) 0.9

Two Harbors Investment Corp (two) 0.7

Triplepoint Venture Growth Corp (tpvg) 0.6

Prospect Capital Corp. (psec) 0.5

Sr. Housing Properties Trust (snh) 0.5

BlackRock Kelso Capital Corp. (bkcc) 0.5

LEXINGTON REALTY TRUST REIT (lxp) 0.5

Solar Senior Capital Ltd. (suns) 0.5

THL CREDIT INC (tcrd) 0.5

TPG Specialty Lending Inc. (tslx) 0.5

Total 34.20%

Income Stock Holdings

Position

Cash 3.45%

Inverse ETF’s 30.50%

Cash and Hedge

8

PVG LOSS AVERSE EQUITY INCOME STRATEGY

Strategy Performance By YearQTR 1 QTR 2 QTR 3 QTR 4 PVG ANNUAL BARCLAY

BOND INDEXS&P 500

GROSS NET GROSS NET GROSS NET GROSS NET GROSS NET

2017 -1.47 -1.80 -0.66 -1.00 -2.12 -2.78 1.45 9.34

2016 1.93 1.59 3.91 3.55 4.12 3.78 -1.92 -2.25 8.17 6.71 2.79 11.96

2015 -0.34 -0.65 -1.84 -2.16 -5.26 -5.55 2.62 2.29 -4.90 -6.09 0.58 1.38

2014 1.47 1.22 0.65 0.35 -2.22 -2.52 -2.77 -3.08 -2.91 -4.03 5.88 13.70

2013 3.33 3.06 -2.27 -2.51 0.16 -0.07 0.91 0.68 2.05 1.08 -2.02 32.44

2012 3.73 3.37 2.28 1.92 3.80 3.43 1.05 0.74 11.30 9.76 4.22 16.00

2011 -0.22 -0.51 2.24 1.89 -4.09 -4.44 7.35 6.98 5.04 3.97 7.84 2.11

2010 0.45 0.29 11.61 11.41 9.41 9.29 1.74 1.54 24.41 23.99 6.54 15.06

2009 -4.65 -4.86 13.67 13.44 6.91 6.66 -4.07 -4.30 11.16 10.17 5.93 26.46

2008 4.51 4.26 3.36 3.12 -10.91 -11.11 5.77 5.52 1.79 0.85 5.24 -37.00

2007 1.44 1.19 -3.01 -3.26 2.76 2.52 -2.58 -2.81 -1.50 -2.47 6.97 5.49

2006 0.39 -0.63 0.25 -0.01 3.56 3.28 0.85 0.60 4.29 3.24 4.33 15.79

2005 -0.32 -0.54 3.04 2.80 3.24 3.00 0.33 0.10 6.39 5.36 2.43 4.91

2004 4.56 4.28 -5.41 -5.67 3.30 3.09 0.88 0.65 3.07 2.35 4.34 10.88

2003 9.98 9.71 5.30 5.03 2.05 1.82 5.39 5.18 24.55 21.74 4.10 28.68

2002 4.25 3.98 -0.55 -0.80 -0.09 -0.35 6.79 6.55 10.62 9.38 10.26 -22.10

2001 3.33 3.04 3.33 3.04 8.43 -11.89

9

PVG DYNAMIC CORE

16.50%

16.50%

16.50%

49.50%

Vanguard S&P 500 ETF

(VOO)

SPDR S&P 500 ETF

(SPY)

iShares S&P 500 ETF

(IVV)

ProShares 1X Inverse

S&P 500 ETF (SH)

Long Portfolio Neutral Portfolio

DYNAMIC CORE

NEUTRAL

DYNAMIC CORE

LONG

33%

33%

33%

Vanguard S&P 500 ETF

(VOO)

SPDR S&P 500 ETF

(SPY)

iShares S&P 500 ETF

(IVV)

*1% invested into cash/cash equivalent *1% invested into cash/cash equivalent

➢ When the trade signals are triggered the strategy moves to a neutral position.

➢ The equally weighted S&P 500 ETF’s will reduce down to half (49.5%) of the portfolio and we shall

purchase half (49.5%) of the portfolio into the ProShares Inverse S&P500 ETF 1X (SH).

➢ 1 % will remain invested in cash.

10

PVG DYNAMIC CORE

Strategy Performance By YearQTR 1 QTR 2 QTR 3 QTR 4 PVG ANNUAL

S&P 500GROSS NET GROSS NET GROSS NET GROSS NET GROSS NET

2017 5.75 5.51 2.98 2.75 8.90 8.41 9.34

2016 1.93 1.59 3.91 3.55 4.12 3.78 -1.92 -2.25 10.78 9.73 11.96

2015 -0.34 -0.65 -1.84 -2.16 -5.26 -5.55 2.62 2.29 -6.53 -7.67 1.38

2014 1.58 1.18 2.74 2.31 -1.65 -2.05 3.49 3.11 6.22 4.55 13.70

2013 4.02 3.56 -0.42 -0.88 2.44 1.98 3.53 3.09 9.86 7.92 32.44

2012 8.35 7.94 -2.27 -2.65 4.21 3.77 1.58 1.15 12.10 10.28 16.00

2011 3.18 2.75 -0.31 -0.70 -11.02 -11.38 6.40 5.98 -2.62 -4.18 2.11

2010 -1.90 -2.21 -3.57 -3.38 5.80 5.42 2.84 2.47 2.92 1.47 15.06

2009 -4.32 -4.57 11.95 11.69 -0.90 -1.12 0.43 0.15 6.60 5.54 26.46

2008 -0.81 -1.07 0.51 0.25 -0.57 -0.85 -4.32 -4.57 -5.16 -6.16 -37.00

2007 1.65 1.35 1.37 1.08 0.96 0.69 -1.48 -1.74 2.48 1.35 5.49

2006 2.18 1.85 -0.04 -0.33 7.41 7.06 4.82 4.50 14.99 13.58 15.79

2005 -4.09 -4.40 2.02 1.70 5.03 4.71 2.66 2.32 5.50 4.17 4.91

2004 2.81 2.45 -0.91 -1.27 -2.87 -3.21 8.78 8.41 7.63 6.14 10.88

2003 -2.40 -2.76 15.09 14.65 4.06 3.67 9.27 8.86 27.72 25.81 28.68

2002 -3.44 -3.83 -15.09 -15.41 -14.49 -14.82 8.19 7.78 -24.15 -25.32 -22.10

2001 - - - - - - 20.16 19.66 20.16 19.66 -11.89

11

PVG TACTICAL TOTAL RETURN

➢PVG’s Tactical Total Return Strategy seeks to outperform US and International indexes and avoid

significant market losses.

➢The investments include 4 Index ETFs (SPY, QQQ, IWM, EFA) which will be invested up to an

aggregate of 90% of the portfolio when there is a long-only signal in the given index.

➢The strategy also incorporates a 10% “Alpha Sleeve” which is tactically deployed using our best ideas

in individual securities or ETFs.

15%

10%

10%

10%15%

10%

10%

10%

10%

SPDR S&P 500 ETF (SPY)

Powershares QQQ Trust (QQQ)

iShares MSCI EAFE (EFA)

iShares Russell 2000 (IWM)

ProShares Short S&P 500 (SH)

ProShares Short Russell 2000 (RWM)

ProShares Short QQQ (PSQ)

ProShares Short MSCI EAFE (EFZ)

Alpha Sleeve

Long Portfolio Neutral Portfolio


HEDGED PORTFOLIO


INVESTED PORTFOLIO

30%

20%20%

20%

10%

SPDR S&P 500 ETF (SPY)

Powershares QQQ Trust

(QQQ)

iShares MSCI EAFE (EFA)

iShares Russell 2000

(IWM)

Alpha Sleeve

*1% invested into cash/cash equivalent *1% invested into cash/cash equivalent

12

PVG TACTICAL TOTAL RETURN

Strategy Performance By YearQTR 1 QTR 2 QTR 3 QTR 4 PVG ANNUAL BARCLAY

BOND INDEXS&P 500

GROSS NET GROSS NET GROSS NET GROSS NET GROSS NET

2017 2.92 2.57 1.55 1.16 4.52 3.76 1.45 9.34

2016 1.00 0.64 0.29 -0.06 2.84 2.45 0.62 0.27 4.82 3.30 2.81 11.98

2015 2.55 2.21 -0.85 -1.19 -5.25 -5.56 0.76 0.40 -2.94 -4.24 0.58 1.38

2014 1.76 1.47 2.31 2.01 -2.80 -3.11 -4.42 -4.73 -3.27 -4.46 5.88 13.70

2013 6.21 5.94 0.48 0.21 3.13 2.85 1.90 1.62 12.15 10.95 -2.02 32.44

2012 8.67 8.37 0.61 0.33 5.47 5.18 -1.92 -2.19 13.10 11.86 4.22 16.00

2011 2.22 1.98 1.25 0.99 -10.89 -11.12 5.84 5.54 -2.39 -3.40 7.84 2.11

2010 -0.96 -1.21 2.36 2.10 2.98 2.73 2.23 1.99 6.74 5.67 6.54 15.06

2009 -5.58 -5.84 15.92 15.62 2.26 1.99 -1.65 -1.91 10.07 8.91 5.93 26.46

2008 2.46 2.19 -0.25 -0.51 -7.18 -7.43 -0.26 -0.53 -5.38 -6.39 5.24 -37.00

2007 1.36 1.08 1.19 0.92 2.03 1.77 -1.72 -1.98 2.86 1.76 6.97 5.49

2006 1.12 0.83 0.07 -0.19 6.37 6.08 3.89 3.61 11.82 10.62 4.33 15.79

2005 -2.53 -2.82 3.46 3.18 3.67 3.36 1.92 1.64 6.56 5.33 2.43 4.91

2004 2.74 2.44 -2.19 -2.48 -0.26 -0.55 7.01 6.69 7.25 5.99 4.34 10.88

2003 -0.53 -0.83 10.47 10.14 2.68 2.39 7.61 7.28 21.42 19.98 4.10 28.68

2002 -0.31 -0.57 -5.92 -6.06 -9.8 -9.93 5.08 4.77 -11.10 -11.86 10.26 -22.10

2001 - - - - - - 10.64 10.35 10.64 10.36 8.43 -11.89

13

U.S. CORPORATE FLEXIBLE BOND

Portfolio HoldingsPosition %

Teva Pharmaceutical 3.15% 10/1/2026 2.57%

Under Armour 3.25% 6/15/2026 2.32%

BNP Paribas 4.25% 10/15/2024 2.10%

KLA-Tencor 4.65% 11/1/2024 2.06%

Expedia 4.50% 8/15/2024 1.98%

Arcelormittal 6.25% 8/5/2020 1.87%

Royal Caribbean 7.50% 10/15/2027 1.62%

SunTrust Banks 6.00% 2/15/2026 1.46%

Case New Holland 7.875% 12/1/2017 1.31%

Cigna 3.25% 4/15/2025 1.29%

Alcoa 5.125% 10/1/2024 1.26%

Coach Inc. 4.25% 4/1/2025 1.19%

Newfield Exploration 5.625% 7/1/2024 1.17%

Constellation Brands 4.25% 5/1/2023 1.15%

Petrobras 5.375% 1/27/2021 1.12%

Goldman Sachs 5.95% 1/15/2027 1.10%

Toll Bros 5.875% 2/15/2022 1.04%

Limited Brands 6.625% 4/1/2021 1.03%

Telecom Italia Cap 7.175% 6/18/2019 0.88%

Hertz Corp. 7% 1/15/2028 0.87%

Anadarko Pete Corp. 3.45% 7/15/2024 0.84%

Limited Brands 6.95% 3/1/3033 0.83%

Hartford Finl Svs Grp 5.5% 3/30/2020 0.80%

Masco Corp. 7.125% 3/15/2020 0.76%

Pulte Group 6.375% 5/15/2033 0.74%

Qwest Corp. 6.75% 12/1/2021 0.73%

Amerada Hess Corp. 7.875 10/1/2029 0.72%

Royal Caribbean Cruises 5.25% 11/15/2022 0.70%

Qwest Corp. 6.75% 12/1/2021 0.72%

Pulte Group Inc. 6.375% 5/15/2033 0.72%

Position %

Sara Lee Corp. 6.125% 11/1/2023 0.66%

HCA Inc. 7.5% 2/15/2022 0.66%

ConocoPhillips Co. 3.35% 5/15/2025 0.65%

Newfield Exploration 5.75% 1/30/2022 0.62%Morgan Stanley 5.5% 7/28/2021 0.62%

Cigna Corp. 7.65% 3/1/2023 0.61%

Liberty Media Corp. 8.5% 7/15/2029 0.61%Amerada Hess 7.30% 8/15/2031 0.60%

Liberty Media Corp. 8.25% 2/1/2030 0.60%Wyndham Worldwide 3.90% 3/1/2023 0.58%

Citizens Communications 7.125% 3/15/2019 0.56%

Toll Bros 4.375% 4/15/2023 0.56%

HCA Inc. 5.875% 5/1/2023 0.56%

Morgan Stanley 4.35% 9/8/2026 0.56%Jabil Circuit Inc. 5.625% 12/15/2020 0.53%

Verizon Communications 4.4% 11/1/2034 0.53%

MeadWestvaco 6.8% 11/15/2032 0.53%MeadWestvaco 7.375% 9/1/2019 0.52%

CBS Inc 7.125% 11/1/2023 0.51%

Telecom Italia 7.2% 7/18/2036 0.53%48.55%

Other

Additional Corporate Bonds/Alt. Maturities 29.37%

Cash 4.64%

20+ Year Treasury Bond 9.15%

Credit Allocation Weight

AA 0.30%

A 6.0%

BBB 55.5%

BB 31.0%

Other 7.20%

100%

14

PVG U.S. CORPORATE FLEXIBLE BOND

Strategy Performance By Year

QTR 1 QTR 2 QTR 3 QTR4 ANNUALBARCLAY

BOND INDEX

BARCLAYS

CREDIT INDEXGROSS NET GROSS NET GROSS NET GROSS NET GROSS NET

2017 2.64 2.48 1.89 1.73 4.58 4.26 1.45 3.66

2016 3.41 3.24 4.36 4.19 3.72 3.55 3.67 3.50 10.44 9.72 2.81 5.63

2015 1.15 0.98 0.16 0.00 -2.35 -2.51 -1.27 -1.42 -2.32 -2.94 0.58 -0.77

2014 1.98 1.80 2.06 1.87 -0.72 -0.88 -0.71 -0.88 2.59 1.88 5.88 7.52

2013 1.32 1.13 0.71 0.49 0.50 0.30 1.26 1.05 3.86 3.03 -2.02 -2.01

2012 3.34 3.17 0.36 0.23 4.01 3.84 2.02 1.90 10.07 9.43 4.22 9.36

2011 1.07 0.84 2.73 2.51 -1.98 -2.21 1.49 1.30 3.29 2.41 7.84 8.35

2010 2.91 2.71 1.52 1.32 3.52 3.36 -0.57 -0.74 7.54 6.78 6.54 8.46

2009 1.50 1.31 11.54 11.31 7.65 7.44 2.68 2.49 25.16 24.18 5.93 16.04

2008 0.36 0.20 -0.36 -0.55 -3.22 -3.39 -6.54 -6.77 -9.56 -10.24 5.24 -3.07

2007 1.80 1.63 -0.37 -0.53 2.07 1.90 1.53 1.36 5.11 4.41 6.97 5.10

2006 -0.28 0.47 3.43 3.23 1.70 1.51 4.90 4.29 5.01 5.49

15


Bulls and Bears…

Given the duration of this currentbullish move for the stock market,the probability that a cyclical bearmarket will occur is rising. Thecurrent Bull Market is now the 2nd

longest in modern history.

16


Stock and Bond Market ValuationBoth stocks and bonds are overvalued

16

The yield of the 10 year treasury iscurrently 2.25%. Generally, the 10 yearnote trends around the nominal GDPgrowth rate. For instance, real GDPgrowth of 3% plus inflation rate of 3%,plus a risk premium, gets an expectedyield on the 10 year treasury of 6-7%.When the bond yields more than 6% itgenerally represents good value, andbelow 4% has a high degree of risk.

The current S&P 500 Shiller P/E ratio shows29.58x. Generally, 15 times earnings orlower, represents attractive periods forowning stocks, and above 15 times, higherrisk periods. It should be noted that thereare periods during recessions whenearnings fall to very low levels and shouldnot be used to assess the value of theequity markets for these purposes like in2008 and 2009.

17


Technicals

• Fed Policy and central banks around the world have driven valuations to excessive levels

• Including PBOC the central banks have purchased over $20 Trillion in Debt

• The valuation or P/E of the market currently is one of the highest in history, but the fear measure is also extremely low (VIX).

• The VIX is a contrarian indicator, when it is low, it indicates investors are too bullish and not a good time to be a buyer.

Bottom of Wave 4

2

4

3

1

5

• 5 Major Waves• Waves 1, 3, and 5 are up• Waves 2 and 4 are corrective waves that move

between optimism and pessimism

• Wave 5 is the final leg up in the cycle

18

History may not repeat, but it sure does rhyme…

S&P 500 – 20-50-200 MDA (1965-1975)

S&P 500 – 20-50-200 MDA (1985-1988)

S&P 500 – 20-50-200 MDA (2003-2009)

S&P 500 – 20-50-200 MDA (2009-201???)

Bottom of Wave 4

Below Bottom of Wave 4

Current Wave 4 Bottom is at 1175


Elliott Wave Theory

http://www.google.com/url?sa=i&rct=j&q=elliott+wave+chart&source=images&cd=&cad=rja&docid=y6Xq4Boo5mPcDM&tbnid=SxJH491jGJ7IDM:&ved=0CAUQjRw&url=http://www.bellstrategic-investments.com/Elliott-Wave.htm&ei=WgacUeaELomuyQHhwYGwCQ&psig=AFQjCNFBsobrghcxT1LzseIk0RT9hpGIVw&ust=1369266138225887

19


This is a very dynamic investment model ranging from conservative to index basedwith protection as a primary driver.• Loss Averse Equity Income• Flexible Fixed Income Exposure• Dynamic S&P 500 Indexing• Tactical “Alpha” Sleeve with US and Int’l Indexing

➢ Loss Averse Equity Income▪ Beta .24 vs. S&P500 Since 2001▪ +0.85% in ‘08▪ Dividend Yield Target: 4% - 6%

➢ US Corporate Flexible Bond▪ Beta .59 vs. Agg Bond Since 2006▪ +3.03 in ’13▪ Yield Target: 4% - 6%

➢ Dynamic Core▪ Beta .48 vs. S&P500 Since 2001▪ -6.16% in ‘08▪ Tactical S&P 500 Indexing▪ Technical Hedging Signals

➢ Tactical Total Return▪ Beta .44 vs. S&P500 Since 2001▪ -6.40% in ‘08▪ Tactical Indexing (US and Int’l)▪ Technical Hedging Signals▪ “Alpha” Sleeve

Conservative Index Based

20


APPENDIX

21

PVG DYNAMIC CORE APPENDIX BACKTEST RESULTS

AVERAGE ANNUAL RETURNS (NET OF FEES)

DECEMBER 31, 2014

1 YEAR 3 YEAR 5 YEAR 10 YEAR INCEPTION

DYNAMIC CORE 8.94% 15.95% 9.05% 10.00% 8.54%

S&P 500 TR 13.69% 20.41% 15.45% 7.67% 5.30%

8.9%

29.7%

10.3%

-3.8%

2.8%

64.1%

-5.3%-1.8%

13.7%

32.4%

16.0%

2.1%

15.1%

26.5%

-37.0%

5.5%

-50%

-30%

-10%

10%

30%

50%

70%

1413121110090807

Dynamic Core Strategy S&P 500 Index

DYNAMIC CORE STRATEGY BACKTEST SUPPLEMENT

50K

100K

150K

200K

250K

300K

350K

400K

Jan '99 Jan '01 Jan '03 Jan '05 Jan '07 Jan '09 Jan '11 Jan '13 Jan '15

DYNAMIC CORE - GROWTH OF $100,000

Dynamic Core Strategy S&P 500 Index

PERIOD ENDING DECEMBER 31, 2014

VERSUS S&P 500

BETA 0.43

R-SQUARE 0.30STANDARD DEV. 11.81

UPSIDE CAPTURE 68.26

DOWNSIDE CAPTURE 42.11

MAX DRAWDOWN

(QUARTERLY)-8.94%

MAX RUN UP (QUARTERLY) 17.04%

22

PVG DYNAMIC CORE APPENDIX BACKTEST RESULTS

DYNAMIC CORE HYPOTHETICAL TRADING SCENARIOS

22

Year: 1987

Date: 10/16/87

Trade: Neutral

YTD: +16.7%

Year: 2008Date: 10/6/08 to11/6/08Trade: Neutral/Stop LossYTD:-3.42%

Year: 2009Date: 3/5/2009Trade: LongYTD: +67.5%

Year: 2013Date: 11/23/2012Trade: LongYTD:+32.31%

Year: 2014Date: 10/15/2014To 10/21/2014Trade: Neutral/LongYTD: +11.15%

’87 Crash

‘08-’09 Recession

‘13-’14 Cyclical Bull

= Long Signal = Neutral or Stop/Loss Signal



23

P V G A S S E T M A N A G E M E N T

L O S S AV E R S E I N V E S T I N G

WWW.PVGASSETMANAGEMENT.COM

6898 S. University Blvd. | Centennial, CO 80122 | 800-777-0818

[email protected]

www.pvgassetmanagement.com

Backtest Disclosure:

Performance results are presented in U.S. dollars and are net of a hypothetical 2% expense ratio and reflect the reinvestment of dividends and capital gains. Actual fees may vary based on, among other factors, account size and custodial relationship.

Model results are after the deduction of advisory fees, brokerage or other commissions, and any other expenses that a client would have paid or actually paid. *Annual returns are compounded over the specified period. No current or prospective

client should assume future performance of any specific investment strategy will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or

withdrawals may cause the performance results of your portfolio to differ materially from the reported composite performance. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment

will either be suitable or profitable for a client's investment portfolio. Historical performance results for market indices generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee,

the incurrence of which would have the effect of decreasing historical performance results. Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or

outperform any particular benchmark or index. The model portfolio will have materially different volatility than the given index. Portfolios in the composite utilize inverse index products. Inverse ETFs are considered risky. The use of inverse

strategies by a fund increases the risk to the fund and magnifies gains or losses on the investment. You could incur significant losses even if the long-term performance of the underlying index showed a gain or loss. Most inverse ETFs “reset” daily.

Due to the effect of compounding, their performance over longer periods of time can differ significantly from the performance of their underlying index or benchmark during the same period of time. Exchange traded funds (ETFs) are offered by

prospectus only. Investors should consider a fund’s investment objective, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other important information, is available from your Financial Advisor and

should be read carefully before investing. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. ETFs trade like stocks and may trade

for less than their net asset value. The S&P500 Total Return Index is the total return version of the S&P 500 Index which includes the effects of reinvested dividends. The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to

measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Inception of the strategy is 12/31/2014. Previous results of the composite are accrued from a back

tested model utilizing PVG’s proprietary technical algorithm overlay which began on 12/31/1998. Back tested performance was derived from the retroactive application of a model with the benefit of hindsight. Prior to 6/21/2006, the U.S. Treasury 2

year rate is used as the cash representative. Since 6/21/2006, the model utilizes ProShares Short S&P500 ETF (SH) to neutralize the portfolio. Performance results do not represent actual trading and they may not reflect the impact that material

economic and market factors might have had on the adviser's decision-making if the adviser were actually managing clients' money. PVG Asset Management (“PVG”) is a registered investment advisor with the United States Securities Exchange

Commission (the “SEC”). SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability. Additional information is available upon request.

Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value

Investment Products:

Risk Considerations:

Past performance is not a guarantee of future results.

Performance results are presented in U.S. dollars and are net-of-actual-management fees and trading expenses of the composite and reflect the reinvestment of dividends and capital gains. Actual fees may vary based on, among other factors, account

size and custodial relationship. *Annual returns are compounded over the specified period. The current dividend yield is calculated gross of fees as of quarter end date and is the expected forward yield. No current or prospective client should assume

future performance of any specific investment strategy will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals may cause the

performance results of your portfolio to differ materially from the reported composite performance. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or

profitable for a client's investment portfolio. PVG’s Portfolio Risk Spectrum is based off a number of factors including portfolio structure, holdings, weighting and risk measures. It is not meant to define the client’s risk profile or appetite when

investing with PVG. The Portfolio Risk Spectrum may change from the current position at any time depending on the factors stated for measurement. Historical performance results for market indices generally do not reflect the deduction of

transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing historical performance results. Economic factors, market conditions, and investment strategies will

affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark. Portfolios in the composite utilize levered index products. Leveraged ETFs are considered risky. The use of leverage

strategies by a fund increases the risk to the fund and magnifies gains or losses on the investment. You could incur significant losses even if the long-term performance of the underlying index showed a gain. Most leveraged ETFs “reset” daily. Due to

the effect of compounding, their performance over longer periods of time can differ significantly from the performance of their underlying index or benchmark during the same period of time. Exchange traded funds (ETFs) are offered by prospectus

only. Investors should consider a fund’s investment objective, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other important information, is available from your Financial Advisor and should be read

carefully before investing. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. ETFs trade like stocks and may trade for less than

their net asset value. The S&P500 Total Return Index is the total return version of the S&P 500 Index which includes the effects of reinvested dividends. The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure

performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-

denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM passthroughs), ABS, and CMBS. The U.S. Aggregate rolls up into other Barclay’s flagship

indices, such as the multi-currency Global Aggregate Index and the U.S. Universal Index, which includes high yield and emerging markets debt. The U.S. Aggregate Index was created in 1986, with index history backfilled to January 1, 1976.The

investment strategy and types of securities held by the comparison indices may be substantially different from the investment strategy and the types of securities held by the PVG Equity Income strategy. PVG Asset Management (“PVG”) is a

registered investment advisor with the United States Securities Exchange Commission (the “SEC”). SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular

level of skill or ability. Inception for the Equity Income strategy is 10/1/2010; prior performance represents the Income portion of the Balanced Strategy Composite, which PVG believes was managed with the same investment goals. Inception for the

U.S. Corporate Flexible Bond strategy is 03/31/2006. Inception for the Dynamic Core strategy is 09/30/2001. The strategy was redefined on 12/31/2014 to a technical algorithm overlay model. The Dynamic Core Strategy previously utilized subjective

fundamental input and is now utilizing only algorithmic technical input. Composite performance represents the results of the PVG management team, which has changed over time due to retirements and new staff. Additional information is available

upon request.

mailto:[email protected]

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PVG A SSET MANAGEMENT€¦ · Mr. Rick Garcia is President and a portfolio manager for PVG. His leadership role includes management of the sales and marketing division at PVG Asset