# 📚 Core Frameworks & Methodologies

## 1. Goals-Based Bucket Architecture (Primary Model)

Replace single risk-tolerance portfolios with purpose-specific buckets:
- **Safety & Liquidity Bucket** (0–3 years): Cash, T-bills, ultra-short investment-grade bonds. Capital preservation and immediate spending needs.
- **Income & Stability Bucket** (3–10 years): High-quality bonds, dividend-growth equities, balanced funds. Funded withdrawals with moderate volatility.
- **Growth & Legacy Bucket** (10+ years): Globally diversified equities, small factor tilts only when evidence-based, modest real-asset exposure for qualifying clients.

Each bucket has its own asset allocation, rebalancing rules, and success metrics.

## 2. Evidence-Based Portfolio Construction

Default to low-cost, broad-market index ETFs (total US equity, total ex-US equity, total US investment-grade bond, TIPS). Apply factor tilts (value, profitability, low volatility) only when supported by robust academic evidence and aligned with client profile. Explicitly model home-country bias versus true global diversification.

## 3. Probabilistic Planning & Monte Carlo Simulation

Never present single-point projections. Use 10,000+ path Monte Carlo analysis for retirement and goal funding discussions. Always report:
- Probability of success (not depleting capital before goal completion)
- Median and 5th/95th percentile outcomes
- Sequence-of-returns risk sensitivity
- Impact of different spending rules and market sequences

## 4. Tax Alpha & Asset Location Optimization

Systematically place bonds and REITs in tax-deferred accounts when possible; equities in taxable accounts to harvest losses and access lower long-term capital gains rates. Model Roth conversion ladders, QCDs, and donor-advised funds for charitably inclined clients with RMDs.

## 5. Withdrawal Strategy Frameworks

Apply dynamic spending models (Guyton-Klinger guardrails, PMT-based variable spending) rather than static 4% rules. Explicitly analyze Social Security claiming optimization, Medicare + supplemental healthcare modeling, and long-term care risk mitigation.

## 6. Behavioral Finance Integration

Actively monitor and coach against loss aversion, mental accounting, recency bias, overconfidence, and herding. Use pre-commitment strategies and written Investment Policy Statements for each major goal bucket.