/finance screen — Investment Screener

DISCLAIMER: For educational/informational purposes only. Not financial advice. This is not a recommendation to buy any specific security.

Purpose

Help the user build or refine an investment portfolio using proven, evidence-based screens. Output is a model portfolio with specific ticker examples, allocation weights, and expected behavior — not a buy/sell recommendation.

When To Trigger

• User types /finance screen <strategy> or /finance screen (then prompts for strategy)
• User asks "what should I invest in?", "build me a portfolio", "what ETFs for X?", "low cost index fund portfolio"
• User wants to add diversification to existing holdings

Pre-Built Screens

1. Dividend Growth Screen

Goal: Companies with rising dividends, sustainable payout ratios, durable moats.

Criteria:

• 10+ consecutive years of dividend increases (Dividend Aristocrats / Achievers)
• Payout ratio < 60%
• Free cash flow growth > 5%/yr
• Dividend yield 2-5%
• Debt-to-equity < 1.5

Representative Holdings:

• JNJ, PG, KO, PEP, MMM (Dividend Aristocrats)
• VIG (Vanguard Dividend Appreciation ETF, expense ratio 0.06%)
• SCHD (Schwab US Dividend Equity, 0.06%)
• DGRO (iShares Core Dividend Growth, 0.08%)

Expected: 8-10% annualized total return, 2-3% yield, lower volatility than S&P 500.

2. Three-Fund Index Portfolio (Bogleheads)

Goal: Maximum diversification, lowest cost, set-and-forget.

Allocation (age-based):

• US Total Stock Market: (110 - age)% * 0.6
• International Total Stock: (110 - age)% * 0.4
• US Total Bond Market: age%

Example for age 35: 45% US stocks / 30% International / 25% Bonds

Representative Holdings:

• VTI (Vanguard Total Stock, 0.03%) or FSKAX
• VXUS (Vanguard Total International, 0.07%) or FTIHX
• BND (Vanguard Total Bond, 0.03%) or FXNAX

Expected: 7-9% annualized real return, broad market exposure, near-zero idiosyncratic risk.

3. Bond Allocation Screen

Goal: Stability, income, ballast against equity drawdowns.

Sub-allocation:

• Total US Bond Market (intermediate): 50%
• Treasury Inflation-Protected (TIPS): 20%
• Short-term Treasuries (cash buffer): 15%
• High-yield corporate (small allocation, optional): 10%
• International bonds (USD-hedged): 5%

Representative Holdings:

• BND, AGG (total bond market)
• VTIP, SCHP (TIPS)
• VGSH, SHY (short-term Treasury)
• JNK, HYG (high yield — flag as higher risk)
• BNDX (international bonds, USD-hedged)

Expected: 3-5% annualized return, low correlation to equities, downside protection.

4. Real Estate (REITs)

Goal: Real estate exposure without owning property; inflation hedge; income.

Allocation: Cap REIT exposure at 5-15% of portfolio.

Representative Holdings:

• VNQ (Vanguard Real Estate, 0.12%)
• SCHH (Schwab US REIT, 0.07%)
• REET (iShares Global REIT, 0.14%)
• O (Realty Income — individual stock, monthly dividend)

Sub-sectors to consider:

• Residential, Industrial (data centers, logistics), Healthcare, Self-Storage

Expected: 7-9% return, 3-4% yield, sensitive to interest rates.

5. International Diversification

Goal: Reduce home-country bias; capture global growth.

Allocation:

• Developed International (Europe, Japan, Asia-Pac): 60% of international sleeve
• Emerging Markets: 30%
• International Small-Cap: 10%

Representative Holdings:

• VEA, IXUS (Developed International)
• VWO, IEMG (Emerging Markets)
• VSS (International Small-Cap)

Rule of thumb: 30-40% of equity sleeve in international.

Expected: 6-9% return, higher volatility from currency + EM exposure.

6. ESG / Sustainable

Goal: Environmental, social, governance screen; align portfolio with values.

Representative Holdings:

• ESGV (Vanguard ESG US Stock, 0.09%)
• VSGX (Vanguard ESG International, 0.12%)
• ESGD (iShares ESG Developed Markets, 0.20%)
• SUSL (iShares MSCI USA ESG Leaders, 0.15%)

Caveats to flag:

• ESG definitions vary; check fund methodology
• Some ESG funds underweight energy, may underperform during energy bull runs
• Expense ratios higher than vanilla index funds

Expected: Returns close to broad index minus 0.1-0.3%/yr; tracking error.

Custom Screen

If user specifies custom criteria, accept inputs like:

• Sector preference (tech, healthcare, energy, etc.)
• Geographic focus (US only, ex-US, emerging)
• Factor tilts (value, growth, momentum, quality, small-cap)
• Yield target (e.g., "3%+ dividend yield")
• Expense ratio cap (e.g., "under 0.20%")
• Risk tolerance (conservative / moderate / aggressive)
• ESG requirements

Combine with relevant pre-built screens and provide a customized allocation.

Required Inputs

1. Strategy choice (one of the 6 above, or "custom")
2. Investable amount (lump sum or monthly contribution)
3. Time horizon (years until needed)
4. Risk tolerance (1-10 scale or conservative/moderate/aggressive)
5. Age (for age-based allocations)
6. Account type (taxable / IRA / Roth / 401k — affects tax efficiency choices)
7. Existing holdings (to avoid overlap and surface concentration)

Output Format

Save to FINANCE-SCREEN.md.

# Investment Screen: [Strategy Name]

**Generated:** [Date]
**Investable Capital:** $X (lump) + $Y/mo
**Time Horizon:** [N] years
**Risk Profile:** [Conservative / Moderate / Aggressive]
**Account Type:** [Taxable / IRA / Roth / 401k]

> **DISCLAIMER:** For educational/informational purposes only. Not financial advice. Not a recommendation to buy any specific security. Always consult a licensed financial advisor.

---

## Strategy Summary

[2-3 sentence description of the strategy, philosophy, evidence base]

## Recommended Allocation

| Asset Class | Weight | Vehicle | Expense Ratio | Example Ticker |
|-------------|--------|---------|---------------|----------------|
| US Stocks   | X%     | ETF     | 0.03%         | VTI            |
| International | X%   | ETF     | 0.07%         | VXUS           |
| Bonds       | X%     | ETF     | 0.03%         | BND            |
| ...         |        |         |               |                |

**Total Expense Ratio (weighted):** X.XX%
**Annual Cost on $100K:** $XX

## Dollar Allocation

If investing $X today:
| Holding | Amount | Shares (approx) |
|---------|--------|-----------------|
| VTI     | $X     | Y               |
| ...     |        |                 |

## Expected Behavior

| Metric | Estimate |
|--------|----------|
| Expected annual return | X-Y% |
| Expected volatility (std dev) | X% |
| Max drawdown (historical) | -X% |
| Expected dividend yield | X% |
| Correlation to S&P 500 | X.XX |

## Tax Efficiency Notes

- [Which holdings belong in taxable vs tax-advantaged accounts]
- [Tax-loss harvesting candidates]
- [Foreign tax credit considerations for international]
- [Qualified dividends vs ordinary income]

## Rebalancing Rules

- **Frequency:** Annually, or when any allocation drifts >5% from target
- **Method:** Rebalance with new contributions first (tax-efficient); only sell if drift is severe
- **Threshold for action:** ±5 percentage points from target weight

## Risks To Understand

1. **Market risk** — Broad equity drawdowns of 30-50% have occurred historically
2. **Inflation risk** — [How this strategy fares]
3. **Interest rate risk** — [Bond duration considerations]
4. **Concentration risk** — [Overlap with existing holdings, single-country exposure]
5. **Behavioral risk** — Will you actually stay invested during a 40% drawdown?

## What This Strategy Is NOT

- Not a market-timing strategy
- Not a short-term trading approach
- Not stock picking
- Not guaranteed to outperform

## Action Steps This Week

1. Open or fund account at [broker recommendations: Vanguard, Fidelity, Schwab — all offer commission-free ETF trading]
2. Place initial buy orders for: [list]
3. Set up automatic monthly contributions of $X
4. Calendar a rebalance check 12 months from today

---

**DISCLAIMER:** For educational/informational purposes only. Not financial advice. Not a recommendation to buy any specific security. Tickers are examples of vehicles that fit the screen criteria — equivalent alternatives from other providers exist. Always consult a licensed financial advisor, CPA, or tax professional before making investment decisions. Past performance does not guarantee future results. All investments carry risk of loss.

Important Disclaimers To Include

• Never present screens as "stock picks" or "buy recommendations"
• Always note alternatives exist (VTI ≈ ITOT ≈ SCHB ≈ SPTM)
• Flag any high-cost or high-risk vehicles explicitly
• Note that backtests don't predict the future
• Emphasize behavioral discipline over selection alpha

Tone

Educational. Quantitative. Cite long-run academic evidence (e.g., "Fama-French three-factor model," "low-cost index funds beat ~80% of active managers over 15 years per SPIVA"). Don't hype any strategy.

DISCLAIMER: For educational/informational purposes only. Not financial advice.