Method and apparatus for diversifying investment based on risk tolerance

A computer-implemented asset allocation system for optimizing investment, comprising:

• at least one question that determines a level of risk a user accepts;
• and
• a processor configured for identifying a level of risk tolerance based on answers to at least one question by a user;
• and
• determining a composition of asset classes, that has optimized return for a specific level of risk based on a risk type obtained from the level of risk tolerance;
• and
• identifying changes to an original portfolio according to the determined composition.

A machine-readable data storage medium encoded with a set of machine-executable instructions for using a data processing system to perform a method of asset allocation for optimizing investment, said method comprising the steps of:

• determining a level of risk for a user based on answers provided to a risk tolerance questionnaire containing at least one question;
• calculating a value based on the answers and assigning the calculated value to the user;
• assigning a risk type to the user based on the calculated value;
• determining an asset allocation plan including at least one asset group and a composition of asset classes in each asset group based on the risk type and optimized return for a specific level of risk.

A computer-implemented method of asset allocation for optimizing investment, said method comprising the steps of:

• determining a level of risk for a user based on answers provided to a risk tolerance questionnaire containing at least one question;
• calculating a value based on the answers and assigning the calculated value to the user;
• assigning a risk type to the user based on the calculated value;
• correlating the risk type to a specific asset allocation plan that includes at least one asset group;
• determining a composition of asset classes in each asset group based on the risk type and an optimized return for a specific level of risk.

A computer system comprising:

• at least one source that provides risk tolerance data;
• a processor that receives and processes risk tolerance data to determine a value, a risk type and a corresponding asset allocation plan according to a software algorithm and at least one predetermined table;
• and
• at least one user interface that provides interactive graphics for determining optimized combination of asset classes for asset allocation,
• whereby a composition of the asset allocation plan is determined based on the risk tolerance data and asset classes.

An asset allocation computer system implemented over a network for optimizing investment comprising:

• a network;
• at least one user interface connected to said network;
• a risk tolerance questionnaire that determines a level of risk a user accepts based on answers provided to the questionnaire containing at least one question;
• and
• at least one processor connected to said network that calculates a value based on the answers and assigns the calculated value to the user according to at least one predetermined table, correlates the risk type to a specific asset allocation plan that includes at least one asset group, determines a composition of asset classes for an optimized return for a specific level of risk and identifies changes to an original portfolio according to the determined composition.

Computer-readable instructions for delivering instructional information embodied in a carrier wave, comprising the steps of:

• determining a level of risk for a user based on answers provided to a risk tolerance questionnaire;
• calculating a value based on the answers and assigning the calculated value to the user;
• assigning a risk type to the user based on the calculated value;
• correlating the risk type to a specific asset allocation plan that includes at least one asset group;
• determining a composition of asset classes in each asset group based on the risk type and an optimized return for a specific level of risk.