ASSET ALLOCATION BASED SYSTEM FOR INDIVIDUAL INVESTOR PORTFOLIO SELECTION

Abstract

A system for allocation asset based portfolio investment and management provides model portfolios which are selected by correlation to investor's responses to a questionnaire concerning time frames and risk tolerance. Recommended model portfolios are presented to investors by asset allocation class percentages only, without identification of any specific securities of fund holdings of the portfolio and without enabling the participating investor to choose or delete specific assets for inclusion in the recommended portfolio. The system enables the investor only to alter the asset allocation. The model portfolios are professionally overseen and managed for compliance with projected returns and conformance to the assigned asset class. The system can be executed on paper or in the form of computer software run locally or on a network.

Description

CROSS-REFERENCES TO RELATED APPLICATIONS

This application is a continuation of, and claims the benefit of, U.S. patent application Ser. No. 10/888,965 filed on Jul. 12, 2004, and is incorporated herein by reference.

FIELD OF THE INVENTION

The present invention pertains generally to investments in securities and, more particularly, to systems for selection of investment portfolios.

BACKGROUND OF THE INVENTION

Modem portfolio theory studies have shown that more than 93% of investment performance is due to asset allocation. For individual investors who attempt to follow this principle, the task of allocating investment or retirement fund dollars among the thousands of marketed securities is formidable, and to be done successfully requires extensive knowledge of securities markets and investing experience. For these reasons, investing in securities was in the past done almost exclusively by trained professionals experienced in the markets and securities selection. The advent of discount brokerage services and the Internet have provided easy access to the purchase and sale of securities to virtually everyone. Although Internet based on-line trading systems have made the process of buying and selling securities very simple, they have actually increased the probability for most of losing money, particularly by those with little or no experience in long term investing.

The assets of pensions and profit sharing plans of corporations and other types of entities have also traditionally been managed by professional investors. The creation of 401(k) type self-directed retirement accounts compelled employees to make their own investment decisions, albeit from a relatively small set of plan choices. The investment allocation of retirement funds is typically done by providing employees with a list of investment funds from which to choose, and requiring the employee to designate an allocation percentage of their contribution dollars to each available fund. Some basic information about the funds, such as investment objective and performance history is also provided. With only this skeletal information, plan participants are expected to correctly allocate their retirement funds for optimal return. Furthermore, there are restrictions on the frequency with which any reallocation of funds can be made.

To provide assistance to this task, retirement planning guides have proliferated, many with more practical approaches which focus on participants' projected financial needs, rather than trying to teach investment strategies. Because money management and investing has significant behavioral and emotional components, many planners make an assessment of how the participant handles or responds to these aspects of investing. This information or assessment is then used to recommend certain investments, typically mutual funds, to the participant. The participant is, however, left to make the final investment decisions on their own. So even though they have been provided with some assistance in the process, this prevailing methodology of retirement planning does not remove the participant—who is most likely a novice at investing—from making the most critical and important decisions which will directly impact their total return.

Although many different computer software-based approaches have been taken to investment and retirement account management, such systems tend to focus on data acquisition and information processing of investor profiles which are then matched to an appropriate portfolio by a professional investment manager. Financial planning software, whether creating an investor profile of including time periods of contributions and withdrawals and risk tolerance, or selecting investments which match a developed profile, all leads to the point at which specific investment decisions must be made on an individual basis for each plan participant.

SUMMARY OF THE INVENTION

The present invention provides a system for selection of a predetermined investment portfolio which is properly allocated in accordance with applicable time periods and risk tolerance of individual investors. The investor is not required and not enabled by the system to pick specific funds or securities in order to achieve an appropriate allocation. The system provides a plurality of model portfolios with differing allocations among stocks, bonds, money market, cash or cash equivalent. The responses to the questionnaire on time period of contributions to investment funds, time period of withdrawal, and risk tolerance are correlated to one of the predetermined model portfolios. A graphical representation of the suggested asset allocation is presented to the investor/participant, who is then required to accept or reject the proposed allocation, without knowing the specific securities proposed for purchase in accordance with the allocation. Importantly, the individual investor or plan participant is never required to pick specific investment vehicles.

In accordance with one aspect of the invention, there is provided a system for automated assembly of a professionally managed portfolio based upon individual investor criteria. The system ascertains the investment goals of an individual investor by a series of questions concerning time frames, risk tolerance, appreciation targets and percentage of total assets to be invested. The system then automatically selects an asset allocation model based upon the responses to the questions. The asset allocation model is presented to the investor by asset class percentage allocations. The investor can then select the proposed asset allocation model. Selection of the model then reveals the identity of the funds among which the allocation is made. Each fund in the model is linked to further information such as the fund history, investment strategy, management team, list of securities held, return history, ratings, etc. By allocating funds according to asset class categories, and then to a corresponding professionally managed portfolios offunds, the investor is protected from the potentially negative results of individual fund picking and market timing. Any re-allocation of the investment portfolio requires a re-taking of the investment objective questionnaire which leads to selection by the system of a different model portfolio based upon the responses to the questionnaire.

In accordance with another aspect of the invention, there is provided a system for proper allocation of investment capital according to an investor's financial behavioral characteristics as determined by responses to a set of questions, wherein a model portfolio is selected which correlates to the investor's responses to the questions and recommended to the investor for purchase by presentation of percentage allocation per asset class and without disclosing individual securities or funds.

And in accordance with another aspect of the invention, there is provided a method of investing an individual investor's capital in an individual investment account portfolio without allowing the investor to select individual securities in the portfolio, the method including the steps of: querying the investor on time remaining for contribution of capital to an investment account and time during which withdrawals will be made from the investment account; selecting an asset allocation model portfolio based upon the investor's responses to the queries; presenting the selected model portfolio to the investor as a recommended model portfolio by showing percentage allocations by asset class and without disclosing individual funds or securities in the recommended model portfolio; requiring the investor to accept or reject the recommended model portfolio, whereby acceptance of the recommended model portfolio allows the investor to view a list of individual funds or securities in the portfolio, and rejecting the recommended model portfolio prompts selection and presentation of a different asset allocation model portfolio.

These and other important principals and concepts of the invention are herein described and claimed in detail, with reference to the accompanying Figures.

DESCRIPTION OF THE FIGURES

FIG. 1 is a block diagram of an organizational and operational structure of the investment system of the present invention;

FIG. 2 is a graphical and textual listing of an asset allocation model portfolio constructed in accordance with the present invention;

FIG. 3 is a graphical representation of an asset allocation model constructed m accordance with the present invention;

FIG. 4 is listing of assets in a model portfolio, and

FIG. 5 is a graphical representation of another asset allocation model portfolio constructed in accordance with the present invention.

FIG. 6 is a graphical representation showing potential best and worst case ending values.

DETAILED DESCRIPTION OF PREFERRED AND ALTERNATE EMBODIMENTS

FIG. 1 represents an organizational structure for operation of the investment system of the invention, described in the context of an employer sponsored investment plan such as a 401(k) plan, although the principals and concepts of the invention are equally well applicable to selection of investment portfolios outside of such qualified plans.

A plan sponsor 1 presents to eligible employees 2 an investment plan in which employees can contribute funds, such as a qualified plan which is tax sheltered, such as 401(k) type accounts. The system of the invention, however, is equally applicable to other types of managed investment funds and plans wherein the funds of individual investors are to be allocated among different types of securities and cash. The plan or qualified plan 3 consists of a plurality of asset allocation models 30, also referred to herein as model portfolios, which are most broadly defined by the overall investment objective, such as High Growth, Growth, Moderate Growth, Moderate, Moderate Conservative, Conservative, Income and Stable Value. These broad classifications of investment portfolios are generally used nomenclature in the industry and the invention is not limited to thereto but is equally applicable to other types and categories of investments. Each asset allocation model is made up of percentage allocations to the various classes of investments selected to produce the targeted returns with the corresponding degree of risk, as shown in FIG. 2. To select the specific securities or funds which make up the model portfolios by satisfying each of the specified asset classes, professional investment management 4 performs the tasks of researching available securities and securities funds, analyzing fund strategies, management and performance history, and continuous monitoring of securities, funds and fund management once selected for inclusion in one of the model portfolios, all in accordance with the primary factors 5, including proper asset allocation correlated to the investor questionnaire, style drift, rebalancing if necessary, overlap, manager tenure, IPS, performance and beta. If in the opinion of the professional management 4, one or more of the securities or funds which are a component of a model portfolio is either underperforming or has drifted from the desired investment strategy or objective, the management 4 has the discretion to sell that security or fund and replace it with another security or fund holding which satisfies the criteria and asset class of the portfolio. This proactive managed approach to an asset allocated investment fund is markedly different than the typical investment plan in which a layman investor simply selects one or more funds and is then locked into those funds for a period of time without any ongoing monitoring, and with restrictions on the ability to make any changes to the portfolio, regardless of market performance. By contrast, the investment system of the invention essentially provides ongoing personal professional money management services to individual plan participants, by assuring proper asset allocation for total return, and then continuously monitoring performance of each of the assets of the portfolio.

Use of the system of the invention by an investor or plan participant begins with a set of inquiries of an individual investor, focused primarily on real life and behavioral factors which impact how the individual would like his/her money invested. In one embodiment, a questionnaire is presented to the investor or plan participant with questions on two main topics, time and risk tolerance. The time related questions are to determine the number of years remaining for contribution of funds to be invested, and to determine the number of retirement years for which withdrawals are to be available. These time parameters are important factors in the asset allocation model selection, primarily with respect to the targeted annual rate of return of the various assets in a portfolio. A second category of questions is designed to ascertain an investor's expectations for investment performance, risk tolerance, and emotional response to fluctuations in portfolio values. The percentage of total assets to be invested in the plan is also determined.

Non-limiting examples of questions in these categories are:

• • 1. Given your financial goals, when will you begin withdrawing from this 401(K)? “I expect to begin making withdrawals in”:
    • Less than 3 years
    • 7 to 10 years
    • 11 to 15 years
    • More than 15 years
  • 2. Once you begin making withdrawals from this 401(K) how long will the money need typically your retirement age subtracted from your life expectancy. e.g. 85−65=20 yrs. (life retirement age)
    • Less than 5 years
    • For 5 to 10 years
    • For 11 to 15 years
    • For 16 to 20 years
    • More than 20 years
  • 3. Which statement best describes your priorities regarding your Street Smart 401(K)?
    • Protecting the money I have is more important to me than making it grow
    • I prefer an investment strategy designed to grow steadily and avoid sharp ups and downs even if it lowers returns
    • Making the most money is most important to me, even if it requires some risks to do so
  • 4. At the beginning of the year, you have $10,000 in your 401(K). The graph to the right [see FIG. 6] shows the performance of four different hypothetical portfolios. Each bar gives the range of potential values at the end of one year. Example: Portfolio B could either go up to $11,000 or drop to $9,500 after one year. Which portfolio are you most comfortable with?
    • Portfolio A
    • Portfolio B
    • Portfolio C
    • Portfolio D
  • 5. Which of the following statements best describes your attitude about investing for your Street Smart 401(K)?
    • Minimizing the chance for loss in my account is most important, so I am willing to accept the lower-long-term returns offered by lower risk investments
    • Experiencing some short-term loss in value in an effort to achieve higher long-term returns is okay. However, I prefer that the majority of my investment be lower risk
    • Seeking higher, long-term returns is important to me, so I am willing to accept substantial short-term losses
    • Maximizing long-term investment returns is most important, and I'm willing to accept large- and sometimes dramatic-short-term losses in value to achieve this goal
  • 6. If you had money invested in a diversified portfolio and the stock market took a downturn, when would you sell your riskier investments and put the money in safer investments?
    • At the first sign of loss
    • After a 10% loss
    • After a 20% loss
    • I wouldn't sell any of my investments. I would continue to follow a consistent, long-term investment strategy
  • 7. Which of the following types of investments do you feel more comfortable with? An investment that might return:
    • 5% a year on average over the long term, but has a 10% chance of experiencing a decline in value in a given year
    • 8% a year on average over the long term, but has a 20% chance of experiencing a decline in value in a given year
    • 11% a year on average over the long term, but has a 30% chance of experiencing a decline in value in a given year
    • 13% a year on average over the long term, but has a 35% chance of experiencing a decline in value in a given year
  • 8. Looking at other investments I own, such as pension, inheritance, stocks, CD's, mutual funds or personal investments, my 401(K) assets represent the following percentage:
    • Over 75%
    • 50%-75%
    • 25%-50%
    • less than 25%

An investor's answers to the questionnaire provide a score or rating which is correlated to the most appropriate asset allocation model which will provide the necessary rate of return and diversification for capital preservation and control of volatility. In the system, the response to each question preferably has some bearing on the percentage allocations in each of the asset classes of the model portfolios. Depending upon how the questions and corresponding multiple choice answers are drafted, the chosen responses can directly impact asset class percentage allocation, or be added to a total score which falls within a bracket correlated to a model portfolio, such as one of the model portfolios shown in FIG. 2, as further described.

The asset allocation model portfolios of FIG. 2 are professionally selected groups of securities or securities funds which fall within the asset classes necessary for diversification and growth. For example, the asset classes in the portfolios may include, in stocks, the various fund types of: large growth, large blend, large value, mid cap growth, mid cap value, small growth, small value, small blend, international growth and international value; real estate (e.g. REITS); and in bonds, the various fund types of for example: high quality, high yield, short term. U.S. government, and international; and in cash or cash equivalents: money market and stable value funds. Other categories of funds, including hybrids of those listed, and funds with similar holdings but which are categorized differently or under different names, can of course be included among the asset classes from which the model portfolios are constructed. Not all asset classes are necessarily included in each model portfolio.

The securities of the portfolios are selected and managed by investment professionals, so that the investor or plan participant never selects, and cannot select, a security for inclusion in his/her model portfolio. The securities or funds are selected for inclusion in the model portfolios by a professional money manager, based upon analysts' percentage recommendations per asset class, and by identifying the top managers within each class, and other factors as known in the industry, including for example and without limitation: alpha, R², standard deviation, returns, security selection and removal, and ERISA compliance. The funds within each portfolio are constantly monitored for style drift, duplication of holdings, manager turnover and performance compared with their peer group asset class. This proactive monitoring and ability to replace a manger or fund quickly when needed gives a highly competitive advantage over portfolios which are managed by the novice self-directed investor or plan participant.

Upon completion of the questionnaire, the investor or plan participant is directly presented with a proposed model portfolio selected in accordance with parameters set by the questionnaire responses. Importantly, the presentation of the proposed model portfolio 30 to the investor/plan participant is in the form of the selected optimal asset allocation, which as shown can be both graphical, as by pie chart 32 or any other graphical representation of percentage components of a whole, and asset class names in fields 34. In field 36 there is provided a textual description of the process by which the model portfolio was selected, with the admonition that the investor or plan participant should select the recommended model portfolio due to the fact that it corresponds with his/her responses to the questionnaire on investment objectives. At this point the investor/plan participant is given the option of accepting the proposed model portfolio as represented by field 38, or viewing alternative model portfolios with different asset allocations representing either more risk or less risk, as represented in fields 40 and 42. Only after selecting the recommended model portfolio are the actual fund holdings disclosed to the investor/plan participant, in the form of an asset holding listing, as shown for example in FIG. 4. In this example each of the portfolio holdings are various types of mutual funds, the names of which can be associated with or hyperlinked to additional detailed information about the funds, as published by the fund proprietors or compiled by fund tracking and rating services such as Morningstar or Lipper Analytical.

In the event the investor/plan participant does not accept the recommended portfolio and instead desires a greater or lesser degree of risk as would result from a different allocation, the investor is given the opportunity to change the allocations by operation of fields 40 or 42. For example, selection of field 42, More Risk, would lead to presentation of a graphical representation of a different model portfolio, as shown for example in FIG. 5, with a greater percentage of total assets invested in stock funds, representing a higher degree of risk than the portfolio of FIG. 3. This alternate model portfolio is presented to the investor in the same general format as in FIG. 3, but with the warning, for example in field 36, that the portfolio does not match the answers given to the questionnaire, and consequently may result in account activity and volatility which is outside the investor's desired parameters. Nonetheless, the investor may choose the alternate model portfolio, by selecting it in field 38, only after which the identity of the specific securities holdings of the portfolio are revealed, as for example in the manner or format shown in FIG. 4.

The principles and concepts of the investment system of the invention can be executed in different forms, such as a paper based system in which the investor questionnaire is presented as a document which is then processed by the plan manager to select the appropriate model portfolio for presentation to the investor, who then accepts or rejects, and once a final selection is made the portfolio holdings are also disclosed on paper to the investor, similar to any paper account statement. Any changes which are made to the model portfolio by the professional managers can also be reported to the investors by a written notification.

The system can also be fully implemented and operated as a computer program which receives and processes all of the data from the investors or plan participants and generates information and screen displays to communicate model portfolio selection and portfolio holdings to the investor on a single computer, or over any type of network, including an intranet, extranet, or global computer network such as the world wide web. In a computerized digital format, the software generates screen displays which prompts the user through the system, such as explanation of the asset allocation investment approach, presentation of the questionnaire and storage of the responses to the questionnaire, presentation of the recommended portfolio without disclosing specific portfolio holdings, and then presenting specific portfolio holdings only once the portfolio has been accepted by the user. In a networked environment the system can be presented as multiple pages at a website domain, access to which can be controlled by an administrator who provides user names and passwords to investors of plan participants. The asset allocation approach of the system is fully explained on one or more pages of the site, and the process of model portfolio selection. The investor questionnaire is presented as text with active select buttons next to each of the multiple choice answers to each question. To segue from the completed questionnaire to presentation of a recommended model portfolio, a button, labeled for example BUILD MY PORTFOLIO can be placed at the end of the questionnaire. This prompts the selection of the appropriate model portfolio for display, in the format for example shown in FIG. 3. Of course other graphical and text formats for displaying this information in digital form are within the scope of the invention. The portfolio options of ACCEPT, MORE RISK and LESS RISK as shown in FIG. 3 can be implemented as separate active buttons on a web page which operate accordingly to either present alternative portfolios, or implement the accepted portfolio, followed by identification of the specific securities or fund holdings of the accepted portfolio as shown in FIG. 4. Each of the specific securities or fund holdings of the accepted portfolio can be hyperlinked to additional information about these assets, such as to the separate website of a fund or fund monitoring service or to other sources of information about the assets.

Claims

1. A method of using a computer system including a computer and a database for managing investments in an account of a particular investor, said method comprising the steps of:

providing a plurality of predetermined model investment portfolios each having a plurality of different investment asset allocations selected in advance by one or more experts to achieve a different degree of risk;

providing an investor questionnaire to the particular investor, said questionnaire including questions adapted for use to determine a degree of risk for the particular investor;

inputting investor answers to the investor questionnaire provided by the particular investor to the computer system;

the computer system automatically determining the degree of risk for the particular investor from said investor answers;

the computer system selecting at least one of said predetermined model portfolios by comparing the degree of risk for the particular investor to the degree of risk of each model investment portfolio; and

the computer system presenting the selected at least one of said predetermined model portfolios for acceptance or rejection by the particular investor, wherein

should the particular investor accept the selected at least one of said predetermined model portfolios, performing the step of purchasing shares in said selected at least one of said predetermined portfolios for holding in the account of the particular investor.

2. The method of claim 1, wherein said questions include a plurality of questions pertaining to a) a number of years which the investor will contribute funds to be invested in a portfolio, b) a number of years which the investor will want to withdraw funds from the portfolio, and c) the investor's tolerance for fluctuation in the value of the portfolio.

3. The method of claim 1, wherein said plurality of predetermined model investment portfolios each has a different investment performance based on the different investment asset allocations selected by the one or more experts.

4. The method of claim 3, wherein said questionnaire includes questions adapted for use to determine an expected investment performance or variance or average performance for the particular investor, and wherein said method further includes the step of the computer system automatically determining the expected investment performance for the particular investor from said investor answers, wherein said selecting the at least one of said predetermined model portfolios for investment by said investor also includes the step of comparing the expected investment performance for the particular investor to the investment performance of each model investment portfolio.

5. The method of claim 1, wherein said particular investor's shares of said at least one of the predetermined model portfolios are automatically asset balanced to maintain consistency with the degree of risk for the particular investor without any purchase or sale of shares of said at least one of the predetermined model portfolios in the account of the particular investor.

6. The method of claim 1, wherein the different investment asset allocations of the at least one of said model portfolios is not changed by implementing said method.

7. The method of claim 1, wherein the asset allocations of each one of said plurality of predetermined model investment portfolios is regularly updated by one or more experts independent of any action by the particular investor.

8. The method of claim 1, wherein, only after the investor accepts the selected at least one of said predetermined model portfolios, the asset allocations of the at least one of said predetermined model portfolios is displayed to the particular investor.

9. A method of using a computer system including a computer and a database for managing investments in an account of a particular investor, said method comprising the steps of:

providing a plurality of predetermined model investment, portfolios each having a plurality of different investment asset allocations selected in advance by one or more experts to achieve a different investment performance;

providing an investor questionnaire to the particular investor, said questionnaire including questions adapted for use to determine an expected investment performance for the particular investor;

inputting investor answers to the investor questionnaire provided by the particular investor to the computer system;

the computer system automatically determining the expected investment performance for the particular investor from said investor answers;

the computer system selecting at least one of said predetermined model portfolios by comparing the expected investment performance for the particular investor to the past and/or expected future investment performance of each model investment portfolio; and

the computer system presenting the selected at least one of said predetermined model portfolios for acceptance or rejection by the particular investor, wherein

should the particular investor accept the selected at least one of said predetermined model portfolios, performing the step of purchasing shares in said selected at least one of said predetermined portfolios for holding in the account of the particular investor.

10. The method of claim 9, wherein said questions include a plurality of questions pertaining to a) a number of years which the investor will contribute funds to be invested in a portfolio, b) a number of years which the investor will want to withdraw funds from the portfolio, and c) the investor's tolerance for fluctuation in the value of the portfolio.

11. The method of claim 9, wherein said plurality of predetermined model investment portfolios each has a different degree of risk based on the different investment asset allocations selected by the one or more experts.

12. The method of claim 11, wherein said questionnaire includes questions adapted for use to determine a degree of risk for the particular investor, and wherein said method further includes the step of the computer system automatically determining the degree of risk for the particular investor from said investor answers, wherein said selecting the at least one of said predetermined model portfolios for investment by said investor also includes the step of comparing the degree of risk for the particular investor to the degree of risk of each model investment portfolio.

13. The method of claim 9, wherein said particular investor's shares of said at least one of the predetermined model portfolios are automatically asset balanced to maintain consistency with the expected investment performance for the particular investor without any purchase or sale of shares of said at least one of the predetermined model portfolios in the account of the particular investor.

14. The method of claim 9, wherein the different investment asset allocations of the at least one of said model portfolios is not changed by implementing said method.

15. The method of claim 9, wherein the asset allocations of each one of said plurality of predetermined model investment portfolios is regularly updated by one or more experts independent of any action by the particular investor.

16. The method of claim 9, wherein, only after the investor accepts the selected at least one of said predetermined model portfolios, the asset allocations of the at least one of said predetermined model portfolios is displayed to the particular investor.

17. A method of using a computer system including a computer and a database for managing investments in an account of a particular investor, said method comprising the steps of:

providing a plurality of predetermined model investment portfolios each having a plurality of different investment asset allocations selected in advance by one or more experts to achieve a different degree of risk and a different investment performance;

providing an investor questionnaire to the particular investor, said questionnaire including questions adapted for use to determine an investor degree of risk for the particular investor and said questionnaire also including questions adapted for use to determine an expected investment performance for the particular investor;

inputting investor answers to the investor questionnaire provided by the particular investor to the computer system;

the computer system automatically determining the degree of risk for the particular investor from said investor answers;

the computer system automatically determining the expected investment performance for the particular investor from said investor answers;

the computer system selecting at least one of said predetermined model portfolios by both comparing the degree of risk for the particular investor to the degree of risk of each model investment portfolio, and by comparing the expected investment performance for the particular investor to the investment performance of each model investment portfolio; and

the computer system presenting the selected at least one of said predetermined model portfolios for acceptance or rejection by the particular investor, wherein

should the particular investor accept the selected at least one of said predetermined model portfolios, performing the step of purchasing shares in said selected at least one of said predetermined portfolios for holding in the account of the particular investor.

18. The method of claim 17, wherein the asset allocations of each one of said plurality of predetermined model investment portfolios is regularly updated by one or more experts to maintain their corresponding degree of risk and their investment performance without any purchase or sale of shares in the account of said particular investor.

19. The method of claim 17, wherein the different investment asset allocations of the at least one of said model portfolios is not changed by implementing said method.

20. A method of using a computer system including a computer and a database for managing investments in accounts of a plurality of investors, said method comprising the steps of:

providing a plurality of predetermined model investment portfolios for purchase by any of a plurality of investors, each one of said predetermined model investment portfolios having a plurality of different investment asset allocations selected in advance by one or more experts to achieve a different degree of risk and a different investment performance;

providing an investor questionnaire to each one of the investors, said questionnaire including questions adapted for use to determine an investor degree of risk for each one of the investors and said questionnaire also including questions adapted for use to determine an expected investment performance for each one of the investors;

inputting answers to the investor questionnaire provided by each one of the investors into the computer system;

the computer system automatically determining the degree of risk for each one of the investors from the answers of that investor;

the computer system automatically determining the expected investment performance for each one of the investors from the answers of that investor;

for each one of the investors, the computer system selecting at least one of said predetermined model portfolios by both comparing the degree of risk for that investor to the degree of risk of each model investment portfolio, and by comparing the expected investment performance for that investor to the investment performance of each model investment portfolio; and

for each one of the investors, the computer system presenting the selected at least one of said predetermined model portfolios selected for that investor for acceptance or rejection by that investor, wherein should that investor accept the selected at least one of said predetermined model portfolios, performing the step of purchasing shares in said selected at least one of said predetermined portfolios for holding in the account of that investor, and wherein

the asset allocations of each one of said plurality of predetermined model investment portfolios is regularly updated by one or more experts to maintain their corresponding degree of risk and their investment performance.