Method and system for investing in a group of investments that are selected based on the aggregated, individual preference of plural investors
First Claim
1. A method of dynamically managing a mutual fund, the mutual fund having assets and liabilities that are collectively owned by plural members, the method comprising:
- adjusting the assets and liabilities of the mutual fund in response to an action of one of the plural members;
determining pro rata ownership interest of said one of the plural members, based on the economic result of said action;
determining pro rata ownership interest of the remaining ones of the plural members, based on the economic result of said action; and
repeating, as required by actions of any of the plural members, each of the preceding acts, so as to dynamically manage the mutual fund.
12 Assignments
0 Petitions
Accused Products
Abstract
A system and method for allowing a plurality of investors to manage investments in a mutual fund or a directly-owned portfolio of investments. The assets and liabilities of the mutual fund are adjusted in response to an action (buy, sell, trade) by one of the fund'"'"'s members or participating investors in the system. A determination is then made of that member'"'"'s and the other fund members'"'"' pro rata ownership interest, based on the economic result of that action. This process is iterated, as necessary, in response to actions taken by any members of the mutual fund. In this way, the mutual fund is dynamically managed. For a portfolio directly-owned by an investor participating in the system, the portfolio would be dynamically managed by having it reflect the dynamically changing individual, and aggregated, actions of other participating members, or others. This investing system provides the first opportunity for investors to invest in a dynamically changing fund or to have a dynamically changing portfolio that is actively managed not by a professional manager but by the constantly changing, aggregated but individual (as opposed to collectively acted upon) preferences of an unlimited plurality of investors.
404 Citations
97 Claims
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1. A method of dynamically managing a mutual fund, the mutual fund having assets and liabilities that are collectively owned by plural members, the method comprising:
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adjusting the assets and liabilities of the mutual fund in response to an action of one of the plural members;
determining pro rata ownership interest of said one of the plural members, based on the economic result of said action;
determining pro rata ownership interest of the remaining ones of the plural members, based on the economic result of said action; and
repeating, as required by actions of any of the plural members, each of the preceding acts, so as to dynamically manage the mutual fund. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28)
wherein investments is defined as being an interest selected from the group consisting of;
equity securities, debt securities, foreign securities, domestic securities, options, warrants, bonds, notes, limited partnership interests, private placement securities, commodities, futures, bank loan syndication interests, global warming rights, air pollution rights, water pollution rights, insurance claim interests, tradable assets, tradable liabilities, and combinations thereof.
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5. The method of claim 1, wherein adjusting the assets and liabilities of the mutual fund is done according to the formula
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6. The method of claim 5, wherein determining pro rata ownership interest of said one of the plural members is done according to the formula
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7. The method of claim 6, wherein the economic value of the action is based on the fair market value of assets and liabilities involved in the action at the time the action occurs.
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8. The method of claim 1, wherein in the event that any one of the plural members acts to withdraw more cash from the mutual fund than the mutual fund is holding, the method further comprises:
selling investments held by the mutual fund so as to raise enough cash to complete the withdrawal.
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9. The method of claim 8, wherein the act of selling investments is done via a rule selected from the group consisting of:
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on a first-in-first-out basis, on a last-in-first-out basis on a pro rata basis, on a basis such that any investments that have not been added to for a substantial period of time are to be sold from first, a basis that minimizes the amount of any taxable gain, on a basis that achieves a selected or pre-determined tax effect, on a basis such that any investment that has a value as a percentage of the value of the fund that is less than a minimum threshold are to be sold from first, on a basis such that any investment that has a value as a percentage of the value of the fund that is more than a maximum threshold are to be sold from first, on a basis that a member designates one or more particular securities to be sold, and on a basis wherein the system keeps track of the investment selections that have been made by each of the plural members, and the past investment selections of the member withdrawing cash are sold to meet the mutual fund'"'"'s cash-out needs.
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10. The method of claim 1, wherein the act of repeating occurs at regular intervals and the act of adjusting is based on aggregated individual purchase and sales decisions of the plural members.
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11. The method of claim 10, wherein when the acts of the method are repeated at regular intervals, any contradictory sales and purchase decisions by the plural members are mitigated so as to arrive at net amounts of each security that is to be bought or sold during the act of adjusting.
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12. The method of claim 1, wherein the act of repeating occurs when accumulated purchase and sales decisions of the plural members, considered in the aggregate, trigger a predetermined threshold.
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13. The method of claim 12, wherein said predetermined threshold is a threshold economic value of the assets and liabilities affected by the accumulated purchase and sales decisions.
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14. The method of claim 12, wherein said predetermined threshold is a threshold volume of securities.
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15. The method of claim 1, wherein actions of the fund members are transmitted via the Internet.
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16. The method of claim 1, wherein the assets and liabilities of the fund include securities purchased via an initial public offering.
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17. The method of claim 1, wherein each of the plural members is provided with information regarding financial performance of the fund.
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18. The method of claim 1, wherein each of the plural members is provided with information regarding investment choices of others of the plural members.
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19. The method of claim 1, wherein each of the plural members are permitted to make investments in the fund on the basis of automatic payments that are made to the fund on a substantially regular interval, along with a standing order for how the payments are to be allocated.
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20. The method of claim 19, wherein the fund is a tax-deferred investment vehicle.
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21. The method according to claim 1, further comprising the step of barring any investor from purchasing a security where an average daily trading volume is sufficiently low such that the investor'"'"'s order would likely impact the price of those securities.
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22. The method according to claim 1, further comprising the step of limiting in the aggregate the amount that an investor can contribute to the fund over a predetermined period.
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23. The method according to claim 1, further comprising the step of limiting in the aggregate the amount that an investor can contribute to the fund relative to an overall size of the fund.
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24. The method according to claim 1, further comprising the step of limiting each investor to no more than a predetermined number of trades over a set time period.
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25. The method according to claim 1, further comprising the step of precluding any swap of securities not held for a predetermined minimum time period.
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26. The method according to claim 1, further comprising the step of limiting the find'"'"'s investment allocation to certain sectors or stocks that satisfy specified criteria as to liquidity or general popularity as determined by ADTV.
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27. The method according to claim 1, further comprising the step of permitting each investor to allocate only from a number of selected stocks that have been chosen by a professional manager.
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28. The method according to claim 1, further comprising the step of selecting investments in which the fund is to invest based on risk associated with the investment.
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29. A process of calculating numeric results for use in dynamically managing a mutual fund, the mutual fund having assets and liabilities that are collectively owned by plural members, the method comprising:
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calculating an adjustment of the assets and liabilities of the mutual fund in response to an action of one of the plural members, thereby producing a first numeric result;
calculating the pro rata ownership interest of said one of the plural members, based on the economic result of said action, thereby producing a second numeric result;
calculating the pro rata ownership interest of the remaining ones of the plural members, based on the economic result of said action, thereby producing a third numeric result; and
repeating, as required by actions of any of the plural members, each of the preceding calculations, so as to enable dynamic management of the mutual fund. - View Dependent Claims (30, 31, 32, 33, 34, 35)
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33. The process of claim 29, wherein calculating the pro rata ownership interest of any one of the plural members is done according to the formula
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34. The process of claim 33, wherein the economic value of the action is based on the fair market value of assets and liabilities involved in the action at the time the action occurs.
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35. The process of claim 29, wherein the process further comprises:
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accumulating statistics regarding actions of the plural members over time so as to generate investment decision information; and
categorizing said investment decision information based on demographic characteristics of the plural members so as to generate investment trend data.
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36. A method of managing a portfolio of securities investments directly held by an owner-investor, the method comprising:
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selecting the securities to be included in the portfolio, on a pro rata basis, according to the aggregated, individual investment choices of a group of system-investors; and
modifying what securities are included in the portfolio so as to reflect changes in the aggregated, individual investment choices of said group of system-investors. - View Dependent Claims (37, 38)
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39. A process for managing a mutual fund, the mutual fund having assets and liabilities that are collectively owned by plural members, the process comprising:
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making a determination of assets and liabilities to be purchased and assets and liabilities to be sold, said determination being based on aggregated, individual purchase and sales decisions of said plural members;
executing purchases and sales of assets and liabilities according to said determination;
repeating the acts of making a determination and executing according to a predetermined rule. - View Dependent Claims (40, 41, 42, 43, 44, 45, 46, 47)
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48. A computer system adapted to dynamically manage a mutual fund, the mutual fund having assets and liabilities that are collectively owned by plural members, the computer system comprising:
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a processor, and a memory including software instructions adapted to enable the computer system to perform;
adjusting the assets and liabilities of the mutual fund in response to an action of one of the plural members;
determining pro rata ownership interest of said one of the plural members, based on the economic result of said action;
determining pro rata ownership interest of the remaining ones of the plural members, based on the economic result of said action; and
repeating, as required by actions of any of the plural members, each of the preceding acts, so as to dynamically manage the mutual fund. - View Dependent Claims (49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73)
wherein investments is defined as being an interest selected from the group consisting of;
equity securities, debt securities, foreign securities, domestic securities, options, warrants, bonds, notes, limited partnership interests, private placement securities, commodities, futures, bank loan syndication interests, global warming rights, air pollution rights, water pollution rights, insurance claim interests, tradable assets, tradable liabilities, and combinations thereof.
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52. The computer system of claim 48, wherein adjusting the assets and liabilities of the mutual fund is done according to the formula
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53. The computer system of claim 52, wherein determining pro rata ownership interest of said one of the plural members is done according to the formula
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54. The computer system of claim 53, wherein the economic value of the action is based on the fair market value of assets and liabilities involved in the action at the time the action occurs.
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55. The computer system of claim 48, wherein in the event that any one of the plural members acts to withdraw more cash from the mutual fund than the mutual fund is holding, the computer system is further enabled to perform:
selling investments held by the mutual find so as to raise enough cash to complete the withdrawal.
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56. The computer system of claim 55, wherein the act of selling investments is done via a rule selected from the group consisting of:
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on a first-in-first-out basis;
on a last-in-first-out basis; and
a pro rata basis.
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57. The computer system of claim 55, wherein the act of selling investments is done on a basis such that certain tax goals are achieved.
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58. The computer system of claim 55, wherein the act of selling investments is done on a basis such that any investments that have not been added to for a substantial period of time are to be sold from first.
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59. The computer system of claim 55, wherein the act of selling investments is done on a basis such that any investment that has a value as a percentage of the value of the fund that is less than a minimum threshold are to be sold from first.
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60. The computer system of claim 55, wherein the act of selling investments is done on a basis such that any investment that has a value as a percentage of the value of the fund that is more than a maximum threshold are to be sold from first.
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61. The computer system of claim 55, wherein the act of selling investments is done on a basis that a member designates one or more particular securities to be sold.
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62. The computer system of claim 55, wherein the act of selling investments is done on a basis wherein the system keeps track of the investment selections that have been made by each of the plural members, and the past investment selections of the member withdrawing cash are sold to meet the mutual fund'"'"'s cash-out needs.
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63. The computer system of claim 55, wherein the act of repeating occurs at regular intervals and the act of adjusting is based on aggregated, individual purchase and sales decisions of the plural members.
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64. The computer system of claim 63, wherein when the acts of the method are repeated at regular intervals, any contradictory sales and purchase decisions by the plural members are mitigated so as to arrive at net amounts of each security that is to be bought or sold during the act of adjusting.
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65. The computer system of claim 64, wherein the act of repeating occurs when accumulated purchase and sales decisions of the plural members, considered in the aggregate, trigger a predetermined threshold.
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66. The computer system of claim 64, wherein said predetermined threshold is a threshold economic value of the assets and liabilities affected by the accumulated purchase and sales decisions.
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67. The computer system of claim 64, wherein said predetermined threshold is a threshold volume of securities.
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68. The computer system of claim 48, wherein actions of the fund members are transmitted via the Internet.
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69. The computer system of claim 48, wherein the assets and liabilities of the fund include securities purchased via an initial public offering.
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70. The computer system of claim 48, wherein each of the plural members is provided with information regarding financial performance of the fund.
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71. The computer system of claim 48, wherein each of the plural members is provided with information regarding investment choices of others of the plural members.
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72. The computer system of claim 48, wherein each of the plural members are permitted to make investments in the fund on the basis of automatic payments that are made to the fund on a substantially regular interval, along with a standing order for how the payments are to be allocated.
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73. The computer system of claim 49, wherein the fund is a tax-deferred investment vehicle.
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74. A computer system adapted to manage a portfolio of securities investments directly held by an owner-investor, comprising:
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a processor, and a memory including software instructions adapted to enable the computer system to perform;
selecting the securities to be included in the portfolio, on a pro rata basis, according to the aggregate investment choices of a group of system-investors; and
modifying what securities are included in the portfolio so as to reflect changes in the aggregate investment choices of said group of system-investors. - View Dependent Claims (75, 76)
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77. A computer program product for enabling a computer to dynamically manage a mutual fund, the mutual fund having assets and liabilities that are collectively owned by plural members, the computer program product comprising:
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software instructions for enabling the computer to perform predetermined operations, and a computer readable medium embodying the software instructions;
the predetermined operations comprising;
adjusting the assets and liabilities of the mutual fund in response to an action of one of the plural members;
determining pro rata ownership interest of said one of the plural members, based on the economic result of said action;
determining pro rata ownership interest of the remaining ones of the plural members, based on the economic result of said action; and
repeating, as required by actions of any of the plural members, each of the preceding acts, so as to dynamically manage the mutual fund.
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78. A computer program product for enabling a computer to manage a portfolio of securities investments directly held by an owner-investor, the computer program product comprising:
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software instructions for enabling the computer to perform predetermined operations, and a computer readable medium embodying the software instructions;
the predetermined operations comprising;
selecting the securities to be included in the portfolio, on a pro rata basis, according to the aggregate investment choices of a group of system-investors; and
modifying what securities are included in the portfolio so as to reflect changes in the aggregate investment choices of said group of system-investors.
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79. A computer system adapted to dynamically manage a mutual fund, the mutual fund having assets and liabilities that are collectively owned by plural members, the computer system comprising:
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an input/output portion manipulating the assets and liabilities of the mutual fund in response to an action of one of the plural members;
an arithmetic logic unit determining pro rata ownership interest of said one of the plural members, based on the economic result of said action, and for determining pro rata ownership interest of the remaining ones of the plural members, based on the economic result of said action; and
a processor controlling said input/output portion and said arithmetic logic unit to repeat their respective functions, as required by actions of any of the plural members, so as to dynamically manage the mutual fund.
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80. A computer system adapted to manage a portfolio of securities investments directly held by an owner-investor, comprising:
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a processor selecting the securities to be included in the portfolio, on a pro rata basis, according to the aggregate investment choices of a group of system-investors; and
an input/output portion modifying what securities are included in the portfolio so as to reflect changes in the aggregate investment choices of said group of system-investors.
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81. An apparatus for dynamically managing a mutual fund, the mutual fund having assets and liabilities that are collectively owned by plural members, the apparatus comprising:
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means for adjusting the assets and liabilities of the mutual fund in response to an action of one of the plural members;
means for determining pro rata ownership interest of said one of the plural members, based on the economic result of said action;
means for determining pro rata ownership interest of the remaining ones of the plural members, based on the economic result of said action; and
means for causing repeated operation, as required by actions of any of the plural members, each of said means for adjusting, said means for determining pro rata ownership interest of said one of the plural members, and said means for determining pro rata ownership interest of the remaining ones of the plural members;
whereby the mutual fund is dynamically managed.
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82. An apparatus for managing a portfolio of securities investments directly held by an owner-investor, the apparatus comprising:
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means for selecting the securities to be included in the portfolio, on a pro rata basis, according to the aggregate investment choices of a group of system-investors; and
means for modifying what securities are included in the portfolio so as to reflect changes in the aggregate investment choices of said group of system-investors.
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83. An investment fund comprising:
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assets and liabilities that are collectively owned by plural investors, the assets and liabilities comprising;
cash and investments;
a computer system adapted to dynamically manage said assets and liabilities, computer system comprising;
a processor, and a memory including software instructions adapted to enable the computer system to perform;
adjusting the assets and liabilities of the mutual fund in response to an action of one of the plural members;
determining pro rata ownership interest of said one of the plural members, based on the economic result of said action;
determining pro rata ownership interest of the remaining ones of the plural members, based on the economic result of said action; and
repeating, as required by actions of any of the plural members, each of the preceding acts, so as to dynamically manage the mutual fund. - View Dependent Claims (84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96)
wherein investments is defined as being an interest selected from the group consisting of;
equity securities, debt securities, foreign securities, domestic securities, options, warrants, bonds, notes, limited partnership interests, private placement securities, commodities, futures, bank loan syndication interests, global warming rights, air pollution rights, water pollution rights, insurance claim interests, tradable assets, tradable liabilities, and combinations thereof.
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87. The investment fund of claim 83, wherein adjusting the assets and liabilities of the mutual find is done according to the formula
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TNEW=TOLD+VACTION
wherein TNEW corresponds to the total value of the assets and liabilities of the mutual fund after the action, TOLD corresponds to the total value of the assets and liabilities of the mutual fund prior to the action, and VACTION corresponds to the economic value of the action.
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TNEW=TOLD+VACTION
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88. The investment fund of claim 87, wherein determining pro rata ownership interest of said one of the plural members is done according to the formula
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89. The investment fund of claim 88, wherein the economic value of the action is based on the fair market value of assets and liabilities involved in the action at the time the action occurs.
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90. The investment fund of claim 86, wherein in the event that any one of the plural members acts to withdraw more cash from the mutual fund than the mutual fund is holding, the computer system is further enabled to perform:
selling investments held by the mutual fund so as to raise enough cash to complete the withdrawal.
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91. The investment fund of claim 90, wherein the act of selling investments is done via a rule selected from the group consisting of:
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on a first-in-first-out basis, on a last-in-first-out basis on a pro rata basis, on a basis such that any investments that have not been added to for a substantial period of time are to be sold from first, on a basis that minimizes the amount of any taxable gain, on a basis that achieves a selected or pre-determined tax effect, on a basis such that any investment that has a value as a percentage of the value of the fund that is less than a minimum threshold are to be sold from first, on a basis such that any investment that has a value as a percentage of the value of the fund that is more than a maximum threshold are to be sold from first, on a basis that a member designates one or more particular securities to be sold, and on a basis wherein the system keeps track of the investment selections that have been made by each of the plural members, and the past investment selections of the member withdrawing cash are sold to meet the mutual fund'"'"'s cash-out needs.
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92. The investment fund of claim 91, wherein the act of repeating occurs at regular intervals and the act of adjusting is based on aggregated purchase and sales decisions of the plural members.
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93. The investment fund of claim 92, wherein when the acts of the method are repeated at regular intervals, any contradictory sales and purchase decisions by the plural members are mitigated so as to arrive at net amounts of each security that is to be bought or sold during the act of adjusting.
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94. The investment fund of claim 83, wherein the act of repeating occurs when accumulated purchase and sales decisions of the plural members, considered in the aggregate, trigger a predetermined threshold.
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95. The investment fund of claim 94, wherein said predetermined threshold is a threshold economic value of the assets and liabilities affected by the accumulated purchase and sales decisions.
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96. The investment fund of claim 94, wherein said predetermined threshold is a threshold volume of securities.
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97. An investment fund comprising:
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assets and liabilities that are collectively owned by plural investors, the assets and liabilities comprising;
cash and investments;
a computer system adapted to dynamically manage said assets and liabilities, computer system comprising;
a processor, and a memory including software instructions adapted to enable the computer system to perform;
adjusting the assets and liabilities of the mutual fund in response to an action of one of the plural members;
determining pro rata ownership interest of said one of the plural members, based on the economic result of said action;
determining pro rata ownership interest of the remaining ones of the plural members, based on the economic result of said action; and
repeating, as required by actions of any of the plural members, each of the preceding acts, so as to dynamically manage the mutual fund;
wherein said action is selected from the group consisting of;
contributing cash to the mutual fund, withdrawing cash from the mutual fund, contributing investments to the mutual fund, withdrawing investments from the mutual fund, ordering that certain assets or liabilities currently held by the mutual fund be traded for certain other assets or liabilities not currently held by the mutual fund;
wherein investments is defined as being an interest selected from the group consisting of;
equity securities, debt securities, foreign securities, domestic securities, options, warrants, bonds, notes, limited partnership interests, private placement securities, commodities, futures, bank loan syndication interests, global warming rights, air pollution rights, water pollution rights, insurance claim interests, tradable assets, tradable liabilities, and combinations thereof;
wherein the economic value of the action is based on the fair market value of assets and liabilities involved in the action at the time the action occurs;
wherein the act of repeating occurs at regular intervals and the act of adjusting is based on aggregated purchase and sales decisions of the plural members; and
wherein, when the acts of the method are repeated at regular intervals, any contradictory sales and purchase decisions by the plural members are mitigated so as to arrive at net amounts of each security that is to be bought or sold during the act of adjusting.
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Specification