Asset Allocation Calculator - Optimize Portfolio Based on Risk Tolerance

Q: What is asset allocation and why is it important?

Asset allocation is the process of dividing investments among different asset categories like stocks, bonds, and alternatives. It's crucial because it's the primary determinant of portfolio performance and risk level.

Determine optimal asset allocation based on your age, risk tolerance, and investment goals. Get personalized portfolio recommendations across stocks, bonds, and alternative investments.

Recommended Portfolio Allocation

Expected Annual Return: 6.3%

Stocks: 65%

Bonds: 30%

Alternatives: 5%

Tips

A common rule: subtract your age from 100 to get your stock percentage (e.g., at 30, consider 70% stocks). Adjust based on risk tolerance.

Don't put all stocks in one company or sector. Use broad index funds or ETFs for instant diversification across hundreds of companies.

Market movements will shift your allocation over time. Rebalance by selling high-performing assets and buying underperforming ones.

Begin with broad index funds or target-date funds. As you gain experience and assets, you can add more sophisticated investments.

FAQ

What is asset allocation and why is it important?+

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