I am really excited to present the Discipline Funds Tool suite.1 The tool suite is an informational and educational set of tools that reflect a lot of the useful processes I use in the course of analyzing financial markets and financial planning.
Some of the tools are rather basic (like the Fee Impact Tool), some are more complex (like the interest rate simulator) and others are pretty sophisticated (like HourglassFP Basic). Each one has its own unique utility and some should really only be used with a financial advisor to ensure you’re interpreting them correctly. But my hope is that they’ll provide some utility to different people with different needs. I have no use in keeping them all private so I figured why not share it? The tool suite is always available at that previous link and in the menu bar under “Strategies and Tools”.
If you have any feedback about the tool suite please email it over. I always love to hear from you guys and with some positive and critical feedback I can build on the tool suite over time and hopefully make it even more useful. I built each tool personally so I would be shocked if they’re all perfect, but I’ve put in a back breaking effort on the whole thing so be kind with any criticism.
HourglassFP is our asset-liability matching tool. It’s actually three tools in one with an asset-liability matcher, risk profiler and portfolio builder. It’s the basic version because the version I built for my own practice is much more detailed and outputs specific recommendations so it’s private primarily for compliance reasons. I can’t recommend or even really mention specific securities here. But even the basic version is incredibly sophisticated and I’ve never seen anything like it. When you’re proficient with it you can build an asset-liability aligned portfolio in about 5 minutes. The Pro version spits out a sophisticated ALM based portfolio straight from a personalized financial plan with options as intricate as bond ladders, bond tents, insurance, factor tilts and other options. And it’s all built into an asset-liability matching process with a time weighted and time aligned output matching financial needs. I hope you love it because I think it’s pretty cool stuff.
I will say that this specific tool is going to seem pretty foreign to most people because asset-liability matching isn’t really widely adopted by our industry. The Risk Profiler, for instance, is actually a purely quantitative balance sheet and income statement analyzer that spits out a risk CAPACITY score and not some subjective metric based on inane questions like “how often do you wet your pants when the stock market declines 30%?” And even though the Portfolio Builder output might look relatively simple there is A LOT going on under the surface. I’ve said it often here and I will say it again – I think the vast majority of investment advisors will be doing ALM work in the coming decade because the ability to integrate planning and investment management just makes too much sense. So hopefully this is the start of me spearheading a little bit of a movement for our industry.
I’ll be doing more detailed primers on Hourglass and some of the other tools in the coming weeks, but poke around and let me know what you think. And if you’re an advisor or existing client who wants access to HourglassFP Pro just shoot me a note. We are just ramping up the beta testing for the software so any and all feedback is appreciated.
Thanks for your interest in my work and as always, stay disciplined!
1 – I know. You’re probably tired of me “introducing” new things. And look. I’m sorry. I know I got a little carried away with it all. You can blame my kids. They lit a fire under my butt. It’s not my fault.