Rate of Return Stops and Capital Return Transactions

Abstract

A method and system for managing and selling investments via electronic means. An investor can establish sell order criteria based upon a preset desired rate of return. The broker thereby monitors the investment and automatically sells it on behalf of the investor once the prescribed sell order criteria are met. The investor can effectively lock in a rate of return prior to its sale without monitoring. Also provided is a method and system for returning to the investor a portion of the initial investment. Once the investment reaches a predetermined value, three simultaneous events occur. A portion or all the initial invested capital is returned to the investor for purposes of reinvestment. The investment instrument is transferred to the broker as collateral, given that its value appreciated relative to the initial purchase amount. Yet the investor still owns the “rights” to the capital appreciation for the life of the investment.

1 . A computer implemented method for returning a portion of capital in an investment comprising:
 determining a capital return trigger event;   determining a capital return amount;   determining an investment sale trigger event;   transferring control of the sale of the investment from an investor to a broker upon the occurrence of the capital return trigger event; and   providing the investor the capital return amount.   
     
     
         2 . The method of  claim 1  wherein the capital return trigger event occurs when a current market price of the investment is less than or equal to a sell order trigger price. 
     
     
         3 . The method of  claim 1  wherein the capital return trigger event occurs when a current market rate of return is greater than or equal to a predetermined rate of return. 
     
     
         4 . The method of  claim 1  wherein the investment sale trigger event occurs when a current market price of the investment is less than or equal to a sell order trigger price. 
     
     
         5 . The method of  claim 4  further comprising:
 determining if a current market price of the investment is less than or equal to the sell order trigger price. 
 
     
     
         6 . The method of  claim 5  further comprising:
 selling the investment if the current market price of the investment is less than or equal to the sell order trigger price. 
 
     
     
         7 . The method of  claim 5  further comprising:
 selling the investment if the current market price of the investment approaches the sell order trigger price. 
 
     
     
         8 . The method of  claim 1  wherein transferring control of the sale of the investment comprises:
 transferring ownership of the investment from the investor to the broker. 
 
     
     
         9 . The method of  claim 1  wherein transferring control of the sale of the investment comprises:
 transferring a right to sell the investment from the investor to the broker. 
 
     
     
         10 . The method of  claim 3  wherein the predetermined rate of return is adjusted for a factor selected from the group consisting of:
 transaction costs; 
 management expenses; 
 tax consequences; 
 dividends; 
 DRIPS's; and 
 bond coupons. 
 
     
     
         11 . The method of  claim 1  wherein the sell order trigger price is adjusted for a factor selected from the group consisting of:
 transaction costs; 
 management expenses; 
 tax consequences; 
 dividends; 
 DRIPS's; and 
 bond coupons.