Our Investment Philosophy
At Crossinvest, we are influenced by the study of Deterministic Chaos in mathematics and believe it accurately describes financial markets.
While the behavior of individual participants within the system is random, their interaction is governed by basic laws, resulting in Deterministic Chaos.
As such, we believe that outcomes within financial markets are highly unpredictable. However, by understanding initial conditions, the nature of the system and possible catalysts, we can position portfolios to minimize the impact of negative outcomes and capture the upside in a strong risk-adjusted manner.
One of the main aspects to achieving this is studying macroeconomic trends to understand the conditions financial markets are operating within, thus allowing us to take risk during the most conducive environments.
- Determine the macroeconomic conditions and the investment outlook for each asset class
- Create the desired asset allocation based on volatility expectations to achieve a strong risk reward profile
- Combine our macro views and bottom-up analysis to build a robust portfolio
- Identify key drivers of risk and ensure risk is balanced and at an acceptable level for different market outcomes
- Ensure a balance of safe assets with risky assets to allow for capital protection and flexibility during sudden and sharp market movements.
- Conduct bottom-up security and fund analysis to identify the best positions within the defined macro asset allocation framework
Portfolio Monitoring & Risk Management
- Monitor each position for changes in trend and fundamental rationale
- Monitor each risk factor of the portfolio for possible changes in market direction
- Monitor market developments and how they may affect portfolios
- Adjust portfolio risk profile and exposure should technical, fundamental or macro views change
We construct portfolios to include individual bonds, direct equities, funds, ETFs, or a combination of all. We also provide a comprehensive breakdown of portfolio exposures and return attributions. We have standard portfolios which may be used in isolation or adjusted to achieve a desired asset allocation.