Asset Allocation Calculator

How it works

Visualize your portfolio’s asset allocation.

Visualize your investment portfolio mix

Description

The Asset Allocation Calculator is a visualization tool designed to help you see the “big picture” of your investments. Asset allocation—how you split your money between different categories like stocks, bonds, and cash—is widely considered the most important factor in determining your portfolio’s long-term risk and return profile.

Inputs

• Stocks: The percentage of your portfolio invested in the stock market (%).
• Bonds: The percentage invested in fixed-income securities or bond funds (%).
• Cash: Money held in savings, money markets, or high-yield accounts (%).
• Other: Alternative investments like real estate, crypto, or commodities (%).

Outputs

• Portfolio Visualization: An interactive breakdown of your current or target allocation.

Chart

• Allocation Breakdown Donut Chart: A clear visual representation of your diversification strategy.

“Good to Know”

• A common rule of thumb is “110 minus your age”: This suggests the percentage you should hold in stocks. For example, a 30-year-old might aim for 80% stocks (110 - 30).
• Rebalancing: If your stocks grow faster than your bonds, your allocation will “drift.” Use this tool periodically to see if you need to sell some stocks and buy bonds to return to your target.
• Diversification doesn’t just mean “owning many things”; it means owning things that don’t all move in the same direction at the same time.

Examples

Example 1: Aggressive Growth (Young Investor)

• Input:
  • Stocks: 90%
  • Bonds: 5%
  • Cash: 5%
• Output:
  • (Shows a high-risk, high-reward profile).

Example 2: Conservative Income (Retiree)

• Input:
  • Stocks: 40%
  • Bonds: 50%
  • Cash: 10%
• Output:
  • (A more stable, income-focused allocation).

Example 3: Balanced Fund

• Input:
  • Stocks: 60%
  • Bonds: 40%
• Output:
  • (The classic “60/40” portfolio used as a benchmark for decades).