FINANCIAL OPTIMIZATION SYSTEM AND METHOD
First Claim
1. A system, for running on a computer, for determining an investment strategy for an entity with assets in taxable and tax-free accounts, comprising:
- an account information input component, to accept information regarding said assets in said taxable and tax-free accounts for said entity;
an investment selection input component, to accept information regarding a plurality of investments, including an indication of a percentage amount of said assets to invest in each of said plurality of investments;
an account amount selection component that selects amounts to invest from said taxable and tax-free accounts randomly or using Genetic Algorithms (GA), wherein said amounts substantially match said indication of a percentage amount to invest in each of said plurality of investments;
a time horizon input component, to accept an indication of a time horizon; and
a return on investment calculation component, to calculate a return on investment for said entity based on said information regarding said assets, said information regarding a plurality of investments, said indication of a percentage amount, said selected amount to invest from said taxable and said tax-free accounts, and said indication of a time horizon;
wherein said account amount selection component determines an amount from said taxable and tax-free accounts in order to produce a maximal after-tax accumulation for said entity at said time horizon.
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Abstract
An improved investment optimizing system and method. Once an investor or investment advisor determines the appropriate asset allocation and that there are both taxable accounts and tax-deferred or tax-free investment accounts, the invention will optimize/maximize the investor'"'"'s ending after-tax asset accumulation, which is the objective of all investors. This is accomplished by allocating the chosen investment vehicles between the taxable and tax-deferred accounts in an optimum way. The invention runs on a computer system and searches for an allocation which results in a maximal return. Intelligent heuristics measure increased performance based on different asset allocations.
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Citations
12 Claims
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1. A system, for running on a computer, for determining an investment strategy for an entity with assets in taxable and tax-free accounts, comprising:
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an account information input component, to accept information regarding said assets in said taxable and tax-free accounts for said entity; an investment selection input component, to accept information regarding a plurality of investments, including an indication of a percentage amount of said assets to invest in each of said plurality of investments; an account amount selection component that selects amounts to invest from said taxable and tax-free accounts randomly or using Genetic Algorithms (GA), wherein said amounts substantially match said indication of a percentage amount to invest in each of said plurality of investments; a time horizon input component, to accept an indication of a time horizon; and a return on investment calculation component, to calculate a return on investment for said entity based on said information regarding said assets, said information regarding a plurality of investments, said indication of a percentage amount, said selected amount to invest from said taxable and said tax-free accounts, and said indication of a time horizon; wherein said account amount selection component determines an amount from said taxable and tax-free accounts in order to produce a maximal after-tax accumulation for said entity at said time horizon. - View Dependent Claims (2, 3, 4, 5, 6)
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7. On a computer system, a method of determining an investment strategy for an entity with assets in taxable and tax-free accounts, said method comprising:
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receiving information regarding a plurality of investments; receiving information regarding a percentage amount of said assets to invest in each of said plurality of investments; receiving information regarding a time horizon; and for each of said plurality of investments, selecting an amount to invest from said taxable and tax-free accounts randomly or using Genetic Algorithms (GA), wherein said determined amount to invest substantially matches said percentage amount to invest in said investment; wherein said determinations will produce a substantially maximal after-tax accumulation for said entity at said time horizon. - View Dependent Claims (8, 9, 10, 11)
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12. A computer system for determining an optimal investment strategy for an entity with assets in taxable and tax-free accounts, comprising:
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means for obtaining tax information, account information, account amounts, and time horizon information from said entity; a GA chromosome structure, for indicating an amount to invest in said taxable and tax-free accounts; means for obtaining initial amounts to invest in said taxable and tax-free accounts; means for calculating an after-tax accumulation based on indications in said GA component structure; means for modifying said GA chromosome structure to improve said calculated after-tax accumulation; and means for displaying said resulting after-tax accumulation.
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Specification