Asset Allocation Calculator
Calculate recommended asset allocation for your portfolio.
Base Stocks% = 110 - Age\nAdjust for Risk Tolerance: Conservative (-10%), Aggressive (+10%)\nAdjust for Horizon: >20 years (+5%), <5 years (-10%)\nBonds% = (100 - Stocks%) * 85%\nCash% = 100 - Stocks% - Bonds%
Example:\nAge: 35, Moderate Risk, 30-year horizon\nPortfolio: $100,000\n\nBase = 110 รขหโ 35 = 75%\nHorizon adjustment: +5% = 80% stocks\nBonds = 20% * 85% = 17%\nCash = 3%\n\nStocks: $80,000\nBonds: $17,000\nCash: $3,000
What is asset allocation?
Dividing investments among asset classes (stocks, bonds, cash) to balance risk and return based on goals and risk tolerance.
What is the 100 minus age rule?
A simple guideline: stocks % = 100 - your age. Modern versions use 110 or 120 to account for longer lifespans.
How often should I rebalance?
Typically annually or when allocation drifts 5%+ from targets. Avoid over-rebalancing to minimize taxes and fees.
Should I adjust for market conditions?
Strategic allocation stays consistent. Tactical allocation adjusts for market views, but requires expertise and timing skill.
What about other assets (real estate, alternatives)?
This calculator uses traditional 3-asset model. Real estate, commodities, and alternatives can be added as separate categories.
๐ Related Calculators
๐ Formula
Base Stocks% = 110 - Age\nAdjust for Risk Tolerance: Conservative (-10%), Aggressive (+10%)\nAdjust for Horizon: >20 years (+5%), <5 years (-10%)\nBonds% = (100 - Stocks%) * 85%\nCash% = 100 - Stocks% - Bonds%
๐ Example Calculation
Example:\nAge: 35, Moderate Risk, 30-year horizon\nPortfolio: $100,000\n\nBase = 110 รขหโ 35 = 75%\nHorizon adjustment: +5% = 80% stocks\nBonds = 20% * 85% = 17%\nCash = 3%\n\nStocks: $80,000\nBonds: $17,000\nCash: $3,000
โ Frequently Asked Questions
What is asset allocation?โผ
Dividing investments among asset classes (stocks, bonds, cash) to balance risk and return based on goals and risk tolerance.
What is the 100 minus age rule?โผ
A simple guideline: stocks % = 100 - your age. Modern versions use 110 or 120 to account for longer lifespans.
How often should I rebalance?โผ
Typically annually or when allocation drifts 5%+ from targets. Avoid over-rebalancing to minimize taxes and fees.
Should I adjust for market conditions?โผ
Strategic allocation stays consistent. Tactical allocation adjusts for market views, but requires expertise and timing skill.
What about other assets (real estate, alternatives)?โผ
This calculator uses traditional 3-asset model. Real estate, commodities, and alternatives can be added as separate categories.