Hollencrest Portfolio Theory

Parent Link: 
Products
Teaser Page Teaser: 
Hollencrest Capital Management employs an investment philosophy that relies heavily on the conceptual underpinnings of Modern Portfolio Theory. Modern Portfolio Theory is an investment discipline that studies the investment returns and risk profiles of different asset classes, and in particular, how those investment returns and risk profiles behave in relationship to each other. Certain asset classes behave differently depending on certain macroeconomic variables: Are interest rates rising or falling? Is the economy growing or contracting? Is the dollar strengthening or weakening? Are trade balances widening or contracting?

Hollencrest Capital Management employs an investment philosophy that relies heavily on the conceptual underpinnings of Modern Portfolio Theory. Modern Portfolio Theory is an investment discipline that studies the investment returns and risk profiles of different asset classes, and in particular, how those investment returns and risk profiles behave in relationship to each other. Certain asset classes behave differently depending on certain macroeconomic variables: Are interest rates rising or falling? Is the economy growing or contracting? Is the dollar strengthening or weakening? Are trade balances widening or contracting?

Some asset classes that have historically been perceived as risky are in fact quite suitable for even conservative investors if they are blended with other asset classes that behave differently in given market environments. Advances in technology now enable investment managers to study the inter-relationship (or "correlation") of returns between different asset classes over time.

We construct portfolios to maximize the returns that they generate relative to the risks that they present. Alternatively, we can look at a prospective client's existing portfolio to determine if it is efficient, which is defined as generating the maximum return per unit of embedded risk.