Our Investment Philosophy

A Common Sense Approach to Investment Management:

In 1990, three US economists were awarded the Nobel Prize for their work on Modern Portfolio Theory. It is this same Nobel Prize winning methodology that we apply to managing investments
for our clients.

As Modern Portfolio Theory (MPT) has demonstrated, your investment portfolio’s risk, return, and
liquidity posture are, in large part, a function of the asset classes that are included in the portfolio.
In fact, asset and sector allocation are now known to be more important determinants of your total returns than either individual securities selection or the timing of investment purchases and sales.

At New Century, we follow a two-step process in constructing and maintaining your portfolio:
The first step is known as “portfolio optimization.” This includes the use of sophisticated portfolio analysis to quantify potential investment risks and returns to arrive at a strategic asset mix tailored to your investment profile. In Modern Portfolio Theory, this “efficient” portfolio can, theoretically, provide you with the highest expected return for any given level of risk or the lowest level of risk for any given rate of return.

The second step is to reserve up to 30% of this “optimized” portfolio in a tactical, Trend Following component that will always be allocated either to equities or to cash, depending on the trend and momentum of the markets. The overlay of the tactical, Trend Following component provides the dual benefits of improved diversification and enhanced risk management to your asset mix – a powerful combination with the potential to increase your returns and help to preserve your portfolio’s value over the long term. To us, this simply makes sense.

At New Century, our investment process provides the ability to quantitatively determine your
portfolio’s risk, expected returns and the optimal asset mix for your particular circumstances. On an ongoing basis, we strive to maintain a proper balance by periodically re-evaluating your portfolio to consider any changes in the financial markets, the economy or your own personal situation. This continual focus on quality and risk management is how we reach our own goal: helping you to succeed in achieving your financial objectives. Again, we believe this simply makes sense.
  

*All investing involves risk including the potential loss of principal. No investment strategy such Modern Portfolio Theory and asset allocation can guarantee a profit or protect against loss in periods of declining values. Active asset management and rebalancing of portfolios may cause investors to incur transaction costs and, when rebalancing a non-retirement account, taxable events will be created that may increase your tax liability. Past performance is no guarantee of future results. Please note that individual situations can vary.  Therefore, the information presented here should only be relied upon when coordinated with individual professional advice.