Methodology
The Vestmind methodology library
Every analysis Vestmind performs is described here in the same seven sections, ending with its assumptions and its limitations.
Answer
The Vestmind methodology library states how every number Vestmind reports is produced. Each page follows the same structure — objective, inputs, calculation, interpretation, assumptions, limitations and data sources — so that any Vestmind figure can be traced to the method that produced it and to the conditions under which it holds.
Why this exists
Anybody can publish a number. What separates a defensible analytical method from generic financial commentary is a written statement of what it assumes and where it stops working — which is why every page here ends with assumptions and limitations rather than with a conclusion.
It also settles a distinction that matters throughout Vestmind: an external fact is something a regulator, an exchange or a filing says, and is cited. A Vestmind calculation is a number this software computes, and links to the method that computed it. A Vestmind analysis is an interpretation of those numbers. A Vestmind methodology is a statement of how Vestmind chooses to do something. Collapsing them is how a company's opinion ends up quoted as a regulator's position.
Contents
- Portfolio analysis methodologyTo state what a portfolio is actually exposed to, at a level of detail the investor cannot reach from a list of holdings and current values.
- Portfolio risk methodologyTo name the specific risks a portfolio carries, each with the holdings and the number behind it, rather than to compress them into one figure that cannot be acted on.
- Asset allocation methodologyTo produce an allocation that follows from what the money is for, and that can be explained goal by goal rather than asserted.
- Portfolio recommendations methodologyTo express a plan as something the investor can actually execute from where they are, at the lowest tax and transaction cost that reaches the target.
- Stock analysis methodologyTo do the assembly and comparison work completely and consistently, so the investor's effort goes into judgement rather than into collection.
- Valuation methodologyTo let an investor disagree with an assumption rather than with a number, which is the only form of disagreement that leads to a better decision.
- VestFire — financial independence methodologyTo answer "how much do I need" from a household's own cash flows rather than from a multiple imported from a different country's market history.