Asset Allocation Calculator
Determine optimal asset allocation (equity vs debt) based on age, risk capacity, and investment horizon. Foundation for portfolio planning.
Asset Allocation Calculator
Result
How it works
Formula Used
Equity % = 100 - Age (adjusted for risk tolerance) Thumb rule: Equity% = 100 - Age; adjust ±20% based on risk
Smart Tips
- 100-Age rule gives baseline equity allocation
- Adjust downward if conservative, upward if aggressive
- Rebalance annually to maintain target allocation
Best Used For
Build balanced portfolio, plan rebalancing strategy
FAQs
Is the 100-Age rule reliable?
It's a starting point, not gospel. Works for moderate risk investors. But adjust for personal factors: income stability (stable = more equity), dependents (more = conservative), risk tolerance, time horizon.
Should I have 100% equity if I'm young?
Theoretically yes, but practically risky. At 25, 100-age = 75% equity. Add 20% more = 95% equity. But bear markets can force emotional selling. Keep some debt (20-30%) for psychological comfort, flexibility.
When should I shift from equity to debt?
Gradually, as you age. Every 1-2 years, shift 2-3% from equity to debt. By 50, should have significant debt. By retirement, 40-50% debt typical. But keep equity for inflation protection in retirement.
What if I'm too risk-averse for my age?
Respect your risk tolerance. Better to stay invested at 40% equity than panic-sell at 80% equity. Comfort matters. If uncomfortable, you'll abandon plan. Slow path consistently is better than aggressive path abandoned.
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