Analytical process

​​Crystal Research's goal is to supply solutions tailored to its clients needs.  Examples of analytical services that may be provided during the applicable engagements include, but are not limited to, the following:

Risk-Return Analysis - The appropriate usage of risk-adjusted returns is a crucial component of modern asset management.  For example, returns earned by individual mutual funds, if not adjusted to account for the risk taken in earning those returns, are extremely misleading.  Determination of return relative to an appropriate benchmark versus the volatility of that benchmark can indicate if the manager is earning the incremental expense such managers charge their clients versus index fund or ETF management fees.

Determination of Appropriate Portfolio and Manager Benchmarks - Most individual investors go directly to selecting managers without stopping to select the benchmarks first, whether that benchmark is meant for determining an individual manager's added value, or the Client's overall performance as a selector of indvidual mutual funds, exchange-traded funds, or individual shares.  Unless invested asset allocations have been appropriately benchmarked, any analysis related to risk-adjusted performance would be inaccurate, and potentially misleading.  Benchmarks should be investable and well maintained.   Borrowing from the institutional investment arena, one potentially helpful step in this process may be calculating and allocating an explicit fee budget.  The use of fee budgeting can provide the Client with a paradigm for choosing between active management, index management and exchange-traded funds for different investment roles. Crystal Research can assist the Client in this process.

Tactical Asset Allocation Support - Strategic asset allocation is typically defined as the long term allocation of investable cash to broad asset classes (e.g. stocks, bonds, cash, alternatives.)  Tactical asset allocation is a short-to-intermediate term reallocation of assets away from the strategic asset allocation targets due primarily to secular threats (e.g. asset bubbles) or opportunities.  Crystal Research can help the Client by: (1) providing access via Crystal Research’s website to the type of information used by market professionals to help the client identify these events; and (2) helping to prepare a "defensive" basket of transactions to be executed by the Client via the transaction counterparty of his/her choice if the manifestation of such a threat is deemed to be imminent.

Assessment of Holdings Duplication – Assessing the risk-return profile of stock portfolios is more complicated than it appears to be.  Crystal Research can perform an analysis of the Client's portfolio to determine if significant and/or unrecognized, overweights or underweights in specific invested assets exist.  Crystal Research can support the Client in determining his/her next actions to address this issue.

​“Completion Fund" Analysis – A completion fund consists of one or more portfolios that are allocated to geographical locations, market capitalizations, or investment styles that may be "missing" from an investor's overall invested equity assets. The Advisor can assist the Client in pursuing this option if the Client finds it desirable, or provide feedback on the downside of this perhaps unintended active bet if not pursued.

Expense Savings Identification – Different investment asset combinations may produce similar returns at very different costs.  Determining the most cost effective strategy is not always straightforward.  Simply choosing the mutual fund with the lowest fee may not allow for improvement in risk-adjusted returns.  Using regression analysis to determine the correlation of actively managed portfolios with multiple indexes may provide insight into cost effective altenatives. Crystal Research can assist the Client in assessing these alternatives.