Example
Input: $60k Stocks, $40k Bonds
Result: 60% / 40% Split
Step-by-Step Guide
1. Input Stocks
Total equity value.
2. Input Bonds
Total fixed income.
3. Calculate
View percentage split.
What is Asset Allocation Calculator?
Asset allocation is the strategy of dividing an investment portfolio across different asset categories to balance risk and reward according to an individual's goals, risk tolerance, and investment horizon.
How it Works
Calculates the percentage weight of each asset class in the total portfolio. Traditionally summarized as Stocks/Bonds ratio (e.g., 60/40).
FAQ
Rule of thumb?
100 minus Age = Stock % (aggressive) or 120 minus Age.
Why bonds?
They reduce portfolio volatility.
Conclusion
Rebalancing to maintain your target allocation forces you to 'sell high and buy low' systematically.