Method and computer program for tax sensitive investment portfolio management
First Claim
1. A method for managing investment portfolios comprising:
- identifying at least one investment portfolio security to be sold in connection with a rebalancing of the investment portfolio; and
rebalancing the investment portfolio if a short-term capital gain or losses, which would result from the rebalancing of the investment portfolio, falls within a threshold for short-term capital gains or losses.
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Accused Products
Abstract
Methods and corresponding systems are provided for managing investment portfolios that includes the steps of identifying at least one security of the investment portfolio to be sold during rebalancing of the investment portfolio, and rebalancing or deferring rebalancing of the investment portfolio based at least in part on a rebalancing threshold for short-term capital gains or losses, investor specified or otherwise. If an implied total short-term capital gain or loss, e.g., a loss or gain that would occur if the at least one security were sold, falls within the rebalancing threshold rebalancing occurs, otherwise rebalancing is deferred for a later time.
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Citations
22 Claims
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1. A method for managing investment portfolios comprising:
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identifying at least one investment portfolio security to be sold in connection with a rebalancing of the investment portfolio; and
rebalancing the investment portfolio if a short-term capital gain or losses, which would result from the rebalancing of the investment portfolio, falls within a threshold for short-term capital gains or losses. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11)
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12. A method for managing investment portfolios comprising:
- determining a difference between securities in the investment portfolio and a target portfolio;
identifying a plurality of securities to be sold based on the determined difference;
allocating randomly, a plurality of times, the securities to be sold to a plurality of tax lots associated with the securities to be sold;
computing an implied total short-term capital gain or loss that would result from the sale of the plurality of securities to be sold in accordance with each of the random allocations;
selecting from the plurality of random allocations the allocation that results in the smallest implied short-term capital gain or loss; and
rebalancing the investment portfolio if the implied short-term capital gain or loss for the selected random allocation falls within a threshold for short-term capital gains or losses.
- determining a difference between securities in the investment portfolio and a target portfolio;
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13. A system for managing investment portfolios comprising at least one computing device having software associated therewith that when executed performs a method comprising:
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identifying at least one investment portfolio security to be sold in connection with a rebalancing of the investment portfolio; and
rebalancing the investment portfolio if a short-term capital gain or loss, which would result from the rebalancing of the investment portfolio, falls within a threshold for short-term capital gains or losses. - View Dependent Claims (14, 15, 16, 17, 18, 19, 20, 21)
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22. A system for managing investment portfolios comprising at least one computing device having software associated therewith that when executed performs a method comprising:
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determining a difference between securities in the investment portfolio and a target portfolio;
identifying a plurality of securities to be sold based on the determined difference;
allocating randomly, a plurality of times, the securities to be sold to a plurality of tax lots associated with the securities to be sold;
computing an implied total short-term capital gain or loss that would result from the sale of the plurality of securities to be sold in accordance with each of the random allocations;
selecting from the plurality of random allocations the allocation that results in the smallest implied short-term capital gain or loss; and
rebalancing the investment portfolio if the implied short-term capital gain or loss for the selected random allocation falls within a threshold for short-term capital gains or losses.
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Specification