Seligman harvester risk management system for achieving a recommended asset allocation and withdrawal strategy
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Abstract
The new and improved method and apparatus of the invention generates a hypothetical illustration of a distribution of possible portfolio values and withdrawal amounts for a designated time period. The invention also provides a new and improved method and apparatus for determining a hypothetical distribution of investment outcomes for a specified portfolio based on a Monte Carlo analysis of historical rates of return for the portfolio and historical rates of inflation. The invention further provides a new and improved method for determining a withdrawal strategy using a combination of fixed dollar and fixed percent withdrawals. The hypothetical illustration of the invention is generated by interacting the combinations of fixed dollar and fixed percent withdrawals, with the hypothetical distribution of investment outcomes for a specified portfolio to facilitate a recommended asset and withdrawal strategy.
55 Citations
151 Claims
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1-89. -89. (canceled)
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90. A method comprising:
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receiving information regarding a client'"'"'s total initial investable assets, and a withdrawal amount having a fixed dollar withdrawal amount and a fixed percentage withdrawal amount;
determining a recommended asset allocation of the initial investable assets; and
generating in a computer a probabilistic distribution of investment outcomes for the recommended asset allocation and the withdrawal amount on a periodic basis. - View Dependent Claims (91, 92, 93, 94, 95)
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96. A method comprising:
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receiving from a client information comprising a financial portfolio having an initial value and an investment strategy having an initial asset allocation and a withdrawal amount;
generating in a computer a distribution of outcomes for the financial portfolio over time based on the investment strategy; and
providing the client with an assessment of how likely the investment strategy will work for a pre-determined period of time. - View Dependent Claims (97, 98, 99)
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100. A financial product for providing periodic future income from an investment, the product comprising:
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a fixed income stream of periodic future payouts based on an initial value of an the investment; and
a variable income stream of periodic future payouts based on a corresponding value of the investment at the time of each said period future payout. - View Dependent Claims (101, 102, 103, 104, 105, 106, 107)
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108. A method for selecting a recommended fixed income and variable income withdrawal strategy comprising:
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obtaining data comprising rates of return for a plurality of asset classes and at least one rate of inflation;
selecting for a particular individual a financial portfolio to be evaluated having an initial investment allocated to at least one of the asset classes and a desired fixed income withdrawal and variable income withdrawal;
generating a probabilistic distribution of investment outcomes for the financial portfolio on an incremental basis within a designated time period by determining a plurality of projected portfolio values using the rates of return of the asset classes and the rate of inflation;
selecting based on said distribution of investment outcomes a recommended fixed income and variable income withdrawal strategy for said designated time period. - View Dependent Claims (109, 110, 111, 112)
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113. A computer program in a computer-readable memory device for selecting a recommended fixed income and variable income withdrawal strategy, the computer program comprising:
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first program means for obtaining data comprising rates of return for a plurality of asset classes and at least one rate of inflation;
second program means for selecting for a particular individual a financial portfolio to be evaluated having an initial investment allocated to at least one of the asset classes and a desired fixed income withdrawal and variable income withdrawal;
third program means for generating a probabilistic distribution of investment outcomes for the financial portfolio on an incremental basis within a designated time period by determining a plurality of projected portfolio values using the rates of return of the asset classes and the rate of inflation;
fourth program means for selecting based on said distribution of investment outcomes a recommended fixed income and variable income withdrawal strategy for said designated time period. - View Dependent Claims (114, 115, 116, 117)
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118. An apparatus for selecting a recommended fixed income and variable income withdrawal strategy comprising:
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a storage device;
a processor connected to the storage device;
a program stored in the storage device and configured to control the processor; and
the processor operative with the program to;
obtain data comprising rates of return for a plurality of asset classes and at least one rate of inflation;
select for a particular individual a financial portfolio to be evaluated having an initial investment allocated to at least one of the asset classes and a desired fixed income withdrawal and variable income withdrawal;
generate a probabilistic distribution of investment outcomes for the financial portfolio on an incremental basis within a designated time period by determining a plurality of projected portfolio values using the rates of return of the asset classes and the rate of inflation;
select based on said distribution of investment outcomes a recommended fixed income and variable income withdrawal strategy for said designated time period. - View Dependent Claims (119, 120, 121, 122)
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123. A method comprising:
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inputting into a computer an amount of an investment for an entity;
inputting into the computer the entity'"'"'s needs, which are the entity'"'"'s total fixed expenses;
inputting into the computer the entity'"'"'s wants, which are the entity'"'"'s total discretionary expenses divided by the investment amount; and
recommending a withdrawal strategy of the investment for the entity having a fixed income component based on the entity'"'"'s needs, and having a variable income component based on the entity'"'"'s wants. - View Dependent Claims (124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134)
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135. A computer program in a computer-readable memory device, the computer program comprising:
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first program means for inputting in a computer an amount of an investment for an entity;
second program means for inputting in a computer the entity'"'"'s needs, which are the entity'"'"'s total fixed expenses;
third program means for inputting in a computer the entity'"'"'s wants, which are the entity'"'"'s total discretionary expenses divided by the investment amount; and
fourth program means for recommending a withdrawal strategy for the entity having a fixed income component based on the entity'"'"'s needs, and having a variable income component based on the entity'"'"'s wants. - View Dependent Claims (136, 137, 138, 139, 140, 141, 142, 143)
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144. An apparatus for selecting a recommended fixed income and variable income withdrawal strategy comprising:
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a storage device;
a processor connected to the storage device;
a program stored in the storage device and configured to control the processor; and
the program operative with the processor to;
obtain an investment amount for an entity;
obtain the entity'"'"'s needs, which are the entity'"'"'s total fixed expenses;
obtain the entity'"'"'s wants, which are the entity'"'"'s total discretionary expenses divided by the investment amount; and
recommend a withdrawal strategy of the investment for the entity having a fixed income component based on the entity'"'"'s needs, and having a variable income component based on the entity'"'"'s wants. - View Dependent Claims (145, 146, 147, 148, 149, 150, 151)
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Specification