Long-term investing

Abstract

The present invention is a method, system and investment product for allocating or structuring investment assets (such as marketable securities, bonds, mortgages, or other property interests, options or derivatives). The system, method or product enables selecting or grouping a number of individual financial instruments together into a portfolio (e.g., a fund or trust) and assigning weight coefficients to the selected financial instruments based upon a predetermined scale. After assigning the weight coefficients, the system or method purchases the selected instruments based on the allocated total purchase for each instrument (i.e., the total price of each instrument reflects is the price per unit×number of units, which correspond the predetermined weight coefficient). Then, the purchased individual financial instruments are allowed to fluctuate and perform for a predetermined time period (i.e., a number of years and months) without any further significant adjustments to the initial portfolio.

1 . A system for creating an investment portfolio, comprising:
 an interface to receive information from a database which includes data related to publicly traded financial instruments, each financial instrument being associated with a company; and   a processor configured to
 receive information associated with each of a selected plurality of the financial instruments contained in the database, the information including one or more of, (1) a bond rating associated with each said selected financial instrument, (2) a debt cash flow of the company associated with each said selected financial instrument, (3) a price-to-earnings ratio (P/E) associated with each said selected financial instrument, (4) a price-to-sales ratio of the company associated with each said selected financial instrument, (5) a price-to-book value ratio of the company associated with each said selected financial instrument, (6) and a ratio of debt to total capitalization of the company associated with each said selected financial instrument; 
 allocate a weight coefficient to each of the plurality of said selected financial instruments based on at least one of (1) when the selected instrument is a bond, the bond rating, (2) the debt cash flow of the company, (3) the price-to-earnings ratio for the selected financial instrument, (4) the price-to-sales ratio of the selected financial instrument compared to the company's total revenue, (5) the price-to-book value for said selected financial instrument, (6) and the ratio of debt to total capitalization of the company, at least some of the weight coefficients being different from others of the weight coefficients; and 
 indicate, based at least on the weight coefficients, a purchase amount for each of the plurality of financial instruments relative to the others of the plurality of financial instruments. 
   
     
     
         2 . The system of  claim 1 , wherein a ratio of the purchase amount for each of the plurality of said selected financial instruments to each of the other purchase amounts is equal to a ratio of the weight coefficient for said selected financial instrument to the other weight coefficient for each corresponding other selected financial instrument. 
     
     
         3 . The system of  claim 1 , wherein the information includes the bond rating associated with each said selected financial instrument, and the processor is configured to allocate the weight coefficients based on at least the bond rating. 
     
     
         4 . The system of  claim 1 , wherein the information includes the debt cash flow of the company associated with each said selected financial instrument, and the processor is configured to allocate the weight coefficients based on at least the debt cash flow. 
     
     
         5 . The system of  claim 1 , wherein the information includes the price-to-earnings (P/E) ratio, and the processor is configured to allocate the weight coefficients based on at least the price-to-earnings (P/E) ratio. 
     
     
         6 . The system of  claim 1 , wherein the information includes the price-to-sales ratio, and the processor is configured to allocate the weight coefficients based on at least price-to-sales ratio. 
     
     
         7 . The system of  claim 1 , wherein the information includes the price-to-book value ratio, and the processor is configured to allocate the weight coefficients based on at least the price-to-book value ratio. 
     
     
         8 . The system of  claim 1 , wherein the information includes the ratio of debt to total capitalization of the company, and the processor is configured to allocate the weight coefficients based on at least the ratio of debt to total capitalization. 
     
     
         9 . A computerized method of creating an investment portfolio, comprising acts of:
 receiving information from a database regarding a plurality of publicly traded financial instruments, each financial instrument being associated with a company, wherein the received information includes one or more of (1) when the instrument is a bond, a bond rating for the company associated with each financial instrument, (2) a debt cash flow of the company associated with each financial instrument, (3) a price-to-earnings (P/E) ratio for each financial instrument, (4) a price-to-sales ratio of the company associated with each, (5) a price-to-book value ratio of the company associated with each financial instrument, (6) and a ratio of debt to total capitalization of the company associated with each financial instrument;   using a processor to determine a weight coefficient for each of the plurality of financial instruments based on at least one of (1) the bond rating, (2) the debt cash flow of the company, (3) the price-to-earnings ratio for the financial instrument, (4) the price-to-sales ratio of the financial instrument compared to the company's total revenue, (5) the price-to-book value ratio for the financial instrument, (6) and the ratio of debt to total capitalization of the company, at least some of the weight coefficients being different from others of the weight coefficients; and   using a computer system to purchase amounts of each financial instrument based at least in part on ratios of the weight coefficients.   
     
     
         10 . The method of  claim 9 , wherein a ratio of the purchase amount for each of the plurality of the financial instruments to each of the other purchase amounts is equal to a ratio of the weight coefficient for the financial instrument to the other weight coefficient for each corresponding other financial instrument. 
     
     
         11 . The method of  claim 9 , wherein a ratio of the purchase amount for each of the plurality of said selected financial instruments to each of the other purchase amounts is equal to a ratio of the weight coefficient for said selected financial instrument to the other weight coefficient for each corresponding other selected financial instrument. 
     
     
         12 . The method of  claim 9 , wherein the information includes the bond rating associated with each said selected financial instrument, and the processor is configured to allocate the weight coefficients based on at least the bond rating. 
     
     
         13 . The method of  claim 9 , wherein the information includes the debt cash flow of the company associated with each said selected financial instrument, and the processor is configured to allocate the weight coefficients based on at least the debt cash flow. 
     
     
         14 . The method of  claim 9 , wherein the information includes the price-to-earnings (P/E) ratio, and the processor is configured to allocate the weight coefficients based on at least the price-to-earnings (P/E) ratio. 
     
     
         15 . The method of  claim 9 , wherein the information includes the price-to-sales ratio, and the processor is configured to allocate the weight coefficients based on at least price-to-sales ratio. 
     
     
         16 . The method of  claim 9 , wherein the information includes the price-to-book value ratio, and the processor is configured to allocate the weight coefficients based on at least the price-to-book value ratio. 
     
     
         17 . The method of  claim 9 , wherein the information includes the ratio of debt to total capitalization of the company, and the processor is configured to allocate the weight coefficients based on at least the ratio of debt to total capitalization. 
     
     
         18 . A system for creating an investment portfolio, comprising:
 an interface to receive information from a database which includes data related to publicly traded financial instruments, each financial instrument being associated with a company; and   a processor configured to
 receive information associated with each of a selected plurality of the financial instruments contained in the database, the information including a market capitalization of the company associated with each said selected financial instrument, and also including one or more of (1) a bond rating for the company associated with each said selected financial instrument, (2) a debt cash flow of the company associated with each said selected financial instrument, (3) a price-to-earnings (P/E) ratio associated with each said selected financial instrument, (4) a price-to-sales ratio of the company associated with each said selected financial instrument, (5) a price-to-book value ratio of the company associated with each said selected financial instrument, and (6) a ratio of debt to total capitalization of the company associated with each said selected financial instrument; 
 group the said selected financial instruments, based on market capitalization, into at least a first group of financial instruments and a second group of financial instruments; 
 allocate a weight coefficient to each of the plurality of financial instruments in the first group based on at least one of (1) when the instrument is a bond, the bond rating, (2) the debt cash flow of the company, (3) the price-to-earnings ratio for the financial instrument, (4) the price-to-sales ratio of the financial instrument compared to the company's total revenue, (5) the price-to-book value ratio for the financial instrument, (6) and the ratio of debt to total capitalization of the company, at least some of the weight coefficients being different from others of the weight coefficients; and 
 indicate, based at least on the weight coefficients and the grouping of the financial instruments, a purchase amount for each of the plurality of financial instruments in the first group relative to the others of the plurality of financial instruments in the first group. 
   
     
     
         19 . The system of  claim 17 , wherein the processor is further configured to allocate a weight coefficient to each of the plurality of financial instruments in the second group based on at least one of (1) when the instrument is a bond, the bond rating, (2) the debt cash flow of the company, (3) the price-to-earnings ratio for the financial instrument, (4) the price-to-sales ratio of the financial instrument compared to the company's total revenue, (5) the price-to-book value ratio for the financial instrument, (6) and the ratio of debt to total capitalization of the company, at least some of the weight coefficients being different from others of the weight coefficients. 
     
     
         20 . The system of  claim 18 , wherein the investment portfolio comprises a mutual fund.