Striving to provide the highest level of investment performance and service to an exclusive clientele
The focus of the research effort at CrestPoint is not on individual stocks. Little incremental benefit accrues to those seeking to consistently add value by researching what has already been over researched by a highly motivated investment community. Besides, when stocks are combined into portfolios the importance of the specific events affecting one stock are offset to a large degree by the specific events affecting another. Diversification reduces risk because individual stocks are not perfectly correlated with each other.
What remain, as a portfolio becomes more diversified, are broader and more general types of risk factors that cannot be diversified away. It is on the identification, measurement, and monitoring of a portfolio's broader risk factors that CrestPoint focuses its research effort.
Fifty-one fundamental factors have been identified and are measured monthly for effectiveness. Along with twenty-four industry groups, twenty are used in the firm's risk model. These twenty have been selected as having the best relationship between factor ranking and subsequent rates of return.
Portolio management is the management of risk, not return. Using the firm's risk model, each portfolio is aligned with the risk exposures of the benchmark. The selection of the appropriate benchmark, however, can enhance returns. Read more.