Investment Methodology
Hanlon Investment Management utilizes a Tactical and Strategic asset allocation approach to making investment decisions.
The Tactical component is based on a proprietary combination of technical, quantitative, and volume analysis, and asks, "should we be in the equity and/or bond market at all, and if so, how much should we commit?"
After performing our daily Tactical Analysis of the markets, we then administer the Strategic component. Here we analyze all the available fund styles to rank and determine which are performing best from a risk-adjusted return basis. We want to compose portfolios with the fund styles that are providing the best return in the current environment and attempt to reduce risk.
For our equity and bond investment choices, certain events need to occur for Hanlon Investment Management to implement changes. They are as follows:
Equity Investments
Tactical changes (decisions to go out of the equity market) occur when the risk-adjusted return potential of the overall market deteriorates enough to partially or totally reduce equity exposure.
Strategic changes occur when the risk-adjusted return potential of the investment(s) we hold becomes less favorable when compared to other available opportunities. Here we replace a prior selection with a new selection.
Bond Investments
We use primarily High Yield funds for our bond investments, although we will invest in Government and High Grade corporate bonds when High Yield opportunities are not available in a particular product.
Generally, changes occur in our bond investments when the prices of our bond holdings decline or when the prices of other bond segments begin to show relative strength as compared to our current holdings.
