Investment structure and method for reducing risk associated with withdrawals from an investment

• US 20090164384A1
• Filed: 02/09/2005
• Published: 06/25/2009
• Est. Priority Date: 02/09/2005
• Status: Abandoned Application

• Current Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Original Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Inventors: Monforth, Michael H., Hellen, Patrick J., Bateson, Douglas F.
• Application Number:
  US11/054,662
• Publication Number:
  US 20090164384A1
• Time in Patent Office: Days
• US Class Current: 705/36.R
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

This invention relates to a method for reducing risk associated with a withdrawal from an investment by determining an amount related to a liability or asset associated with the withdrawal and incorporating at least a portion of the amount into other liabilities or assets related to the investment. Further, the absolute value of the amount is amortized. Therefore, the effects of multiple withdrawals are balanced and reduced with time, thereby reducing the overall risk associated with withdrawals. Accordingly, withdrawals can occur more frequently, and a more liquid investment structure is provided.

Claims

1. A method for reducing risk associated with a withdrawal from an investment, the method comprising:

determining an amount related to a liability or asset resulting from the withdrawal; and

incorporating at least a portion of the amount into a liability or asset related to the investment.

2. The method of claim 1 wherein the amount is a difference between a book value and an actual value of the withdrawal.

3. The method of claim 1 wherein the liability or asset related to the investment is a difference between a book value and a market value of the investment after the withdrawal.

4. The method of claim 1 further comprising:

reducing an absolute value of the amount over a predetermined period.

5. The method of claim 1 further comprising:

amortizing the amount over a predetermined period.

6. The method of claim 1 further comprising:

amortizing the amount over three years on a straight-line basis.

7. The method of claim 1 wherein the incorporating results in a value and the method further comprises:

making a payment in an amount of the value, if positive, upon the occurrence of a predetermined event; and

receiving a payment in an amount of the value, if negative, upon the occurrence of the predetermined event.

8. The method of claim 7 wherein the predetermined event is a surrender.

9. A method for providing a return for an investment, the return having less volatility than an actual value of the investment, and the method comprising:

allowing an amount to be withdrawn from the investment;

calculating a difference between a book value and a market value of the amount withdrawn from the investment;

calculating an agreed value as;

(BV−

MV)+(DIFF), wherein BV is a book value of the investment, MV is a market value of the investment, and DIFF includes at least a portion of the difference between the book value and the actual value of the amount withdrawn from the investment; and

promising to pay the agreed value upon the occurrence of a predetermined event, if the agreed value is positive.

10. The method of claim 9 wherein BV is a book value of the investment after the amount has been withdrawn, and MV is a market value of the investment after the amount has been withdrawn.

11. The method of claim 9 further comprising:

receiving a promise to pay the agreed value upon the occurrence of a predetermined event, if the agreed value is negative.

12. The method of claim 9 further comprising:

calculating BV by subtracting;

(a) the book value of the amount withdrawn from (b) the book value of the investment prior to withdrawal of the amount; and

calculating MV by subtracting (a) the actual value of the amount withdrawn from (b) the market value of the investment prior to withdrawal of the amount.

13. The method of claim 9 further comprising:

reducing an absolute value of the difference between the book value and the actual value of the amount withdrawn from the investment over a predetermined period.

14. The method of claim 9 further comprising:

amortizing an absolute value of the difference over a predetermined period.

15. The method of claim 9 further comprising:

amortizing an absolute value of the difference over three years on a straight-line basis.

16. The method of claim 9 wherein the predetermined event is a surrender.

17. The method of claim 9 further comprising:

calculating a remaining difference by reducing an absolute value of the difference between the book value and the actual value of the amount withdrawn from the investment;

allowing a second amount to be withdrawn from the investment;

calculating a second difference between a book value and an actual value of the second amount withdrawn from the investment; and

calculating DIFF as a sum of the remaining difference and the second difference,

wherein BV is calculated at least in part by subtracting;

(a) the book value of the second amount withdrawn from (b) the book value of the investment prior to withdrawal of the second amount, and

wherein MV is calculated at least in part by subtracting (a) the actual value of the second amount withdrawn from (b) the market value of the investment prior to withdrawal of the second amount.

18. A method for providing a return for an investment, the return having less volatility than a market value of the investment, and the method comprising:

calculating, with a computer, a first difference between a book value and the market value of the investment;

calculating, with the computer, a second difference between the book value and an actual amount withdrawn from the investment;

combining the second difference with the first difference, the combining resulting in a combined value; and

promising to pay the combined value upon an occurrence of a predetermined event, if the combined value is positive.

19. The method of claim 18 further comprising:

receiving a promise to pay the value upon the occurrence of the predetermined event, if the combined value is negative.

20. The method of claim 18 further comprising:

reducing an absolute value of the second difference over a predetermined period.

21. The method of claim 18 further comprising:

amortizing the absolute value of the second difference over a predetermined period.

22. The method of claim 18 further comprising:

amortizing the absolute value of the second difference over three years on a straight-line basis.

23. The method of claim 18 wherein the predetermined event is a surrender.