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At Pacific Global Investment Management Company, we are value investors. We use patience and discipline as we seek to buy high quality, well-positioned companies at attractive prices. As focused investors, we know each company in which we invest, how it operates and what makes it successful. Click to watch the PG WELCOME VIDEO.
Chairman and President George A. Henning shares his vision for Pacific Global.
Download complimentary issues of our weekly market recap.
Periodically, we look to provide insight from portfolio managers on the market and management of their portfolios. Following is a conversation about the factors impacting the markets with Vi Chan, CFA.
JB: So far this year, the stock market has been volatile nearly every day; what are your thoughts on the positive and negative swings in the market?
VC: Markets have been overly dramatic this year as investors react to headline news. In early January, concerns about a slowdown in China and slumping crude oil prices worried investors. Major stock indices recorded their worst ever start to a year; with losses of 10% or more, they quickly entered correction territory. Investors appeared content to “sell-first, ask-questions-later” as sentiment turned excessively negative, culminating at one point with fears of an imminent recession. In a rush for safety, investors favored government bonds and gold; the yield on the benchmark 10-year U.S. Treasury Note fell to a 3½-year low while gold prices surged. Then, following the worst January results for stocks since 2009, the mood began to shift in mid-February. People started to realize that maybe things weren’t as dire as they thought; encouraging economic data and stabilizing oil prices helped reverse the outlook. Fears of a recession quickly faded and the markets rallied to recoup most of the earlier losses.
I think the market action so far this year has been fascinating; it’s a reminder of the importance of having a long-term perspective.
Click to download “Riding the Wave of Investor Sentiment”
During the first half of 2015, the stock market was relatively calm with the indices remaining within a historically narrow range. In the third quarter, markets sold off and volatility increased in response to a series of events including Greek bailout negotiations, concerns of an economic slowdown in China, and the Federal Reserve’s decision in September to delay raising interest rates; from peak to trough, the S&P 500® Index declined 12.0%, the Russell Midcap® Index fell 12.4%, and the Russell 2000® Index of small companies tumbled 16.0%. In the fourth quarter, though, global economic concerns eased. And, on the strength of solid employment data, the Fed announced the first interest rate increase since 2006. The move, along with the Fed’s comments emphasizing a gradual pace of future rate hikes, prompted a market rally; even so, the markets finished the year slightly lower.
Click to download “2015: Year In Review”