What are HollyTools?

The new tool available to individual investors to build and measure the risk of a portfolio of financial assets 

What are HollyTools used for?

  • HollyTools is a tool for learning how to build investment portfolios in a rigorous but easy and intuitive way.
  • The HollyTools follow a rigorously grounded methodology that ensures you build your portfolio based on the risk you are willing and able to take, rather than solely on expectations of a particular asset’s return.
  • In addition, you are provided with powerful algorithms that will allow you to not only understand the risk and simulate scenarios, but also optimise it to achieve a better profitability / risk profile. 
  •  HollyTools allow you to incorporate in your simulation a representation of a wide range of financial assets from all over the world: equities, bonds, commodities, even cryptocurrencies.
  • This is the portfolio building methodology that allows to avoid the main error in the building of a portfolio which is to add assets without having an overall view of the portfolio.

It is very common to find, among individual investors, aggregates of assets that are being incorporated solely on the basis of their profitability expectations. This means that they are unaware of the overall risk they are taking, that the portfolio is not being adequately diversified, and that it is not optimised. 

How does it work?

The HollyTools consists of 4 simple steps in which you can:

  1. Select some assets to build your first portfolio. 
  2. Know the risk of the portfolio you have built and you will be able to see if it fits with the risk you want and can assume.
  3. Simulate scenarios and see their effect on your portfolio.
  4. Use our advanced algorithms allowing you to improve your portfolio for the risk you finally want to assume, or you can even create your portfolio directly with these algorithms.

The optimisation algorithms, based on the analysis of different performances of individual assets in different market situations and among the rest of the assets in the portfolio, choose the best combination that maximises the expected return for a given level of risk.

For the most advanced users:

  1. It can be very useful for Asset Allocation. You can get to know the risk and the best combinations when building the main structure of a portfolio.
  2. You can build an optimised portfolio with stock market indices of the main global markets through Stock Market Index ETFs (An Stock Market tIndex ETF is an investment fund that trades on financial markets like any other financial asset, such as company shares, and seeks to replicate and track a benchmark index of a given stock market) 

And this is just a preview

In future versions:

  1. For each asset and at an overall portfolio level, you can have the expected returns and the intervals of possible returns.
    • The expected returns are calculated based on the level of risk being assumed. It informs us the return that should be achieved in the long term to compensate for the risk being taken.
    • The intervals of possible returns are the range of dispersion of annual returns given the level of risk for a given confidence level.
  2. You will be able to get to know what the reduction of risk is in your portfolio, due to the diversification effect.
  3. You also will know the benefits in your portfolio’s risk/return profile thanks to the optimisation algorithms, in terms of expected returns.
  4. New features will also be incorporated and also adding more financial assets.

Conclusion

Our mission is to universalise both knowledge and also the most advanced tools so that you can make better investment decisions to achieve your objectives.

In this first delivery of the HollyTools you will be able to learn how to have an overall vision of a portfolio from the perspective of risk.

José Luís Álvarez – CEO HollyMontt

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