Asset Allocation Calculator

How can you best allocate your investments across asset classes? In what proportion should you hold the different assets? These are important decisions, and getting them right is key to achieving your financial goals. This is where the asset allocation calculator comes in. This allocation calculator helps users decide on the right mix of assets and their proportions to achieve your financial goals.

Asset Allocation Calculator (Please either enter the numeric value in the boxes or use the sliders to select the right amount)

Recommended Asset Allocation

Based on your profile, it is suggested to
invest 30% in Debt and 70% in Equity

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What is an Asset Allocation Calculator?

An asset allocation calculator, also known as a portfolio asset calculator or investment asset calculator, allocates assets in a portfolio according to certain specifications, such as financial goals, investment horizon, forecast, and the risk profile associated with the assets. The asset allocation calculator considers equity, fixed income, gold, and real estate. The reason these classes are necessary is because it helps establish the different levels of risk and potential returns that are viable with the given assets.

Due to the different classes, the returns on each asset are not fixed and prone to fluctuate over time. Through this allocation, stakeholders get a sense of what class their asset belongs to, the risks, and the probability of good returns. It keeps them informed, and their risks and returns are averaged out as well.

How to use the Asset Allocation Calculator?

The Asset Allocation Calculator is a user-friendly tool that instantly lets users get a sense of their appropriate asset allocation. The asset allocation calculator by age is the most popular way of utilising the calculator. To calculate your asset allocation, you need to enter the following values –

  • Current Age
  • Investment Horizon (in years)
  • Risk Level (from low to high)

Once these values have been entered, the asset allocation calculator will create a profile and suggest an ideal asset allocation mix. The asset allocation calculator's results indicate that you should consult a wealth manager or a financial planner before investing.

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Frequently Asked
Questions
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Q1.

Most experts suggest that diversification is one of the best ways to reduce risk. An asset allocation calculator helps users plan and allocate investments to different asset classes. It allows you to plan asset allocation according to your risk and return profile. It helps you arrive at an optimal mix of assets based on your financial goals and time horizon.
Q2.

A Public Provident Fund (PPF) calculator estimates the interest earned and the maturity value of your contributions to the PPF account.

On the other hand, a portfolio asset allocation calculator calculates the ideal allocation of various assets for a client, be it debt (like PPF) or equities or commodities. It highlights the associated risks, the returns, and how the assets are divided in each class.

Q3.

The reason people often acquire and maintain their assets is to minimise risks. To do this, they must know everything there is to know about their assets and the various properties of these assets. To do this, an asset allocation calculator is the best option. By allocating assets into different classes, the calculator is essentially helping you understand diversification. This separates high-risk and low-risk assets, assisting users in making decisions based on their risk appetite. Once you know the risk profile of each asset and its return potential, you can allocate your investments in a better way.

Q4.

You only need to input the following values into the calculator:

  • Age
  • Current Assets
  • Savings Per Year
  • Marginal Tax Rate
  • Income Required
  • Risk Tolerance
  • Economic Outlook

Based on your inputs, the calculator is engineered to recommend an appropriate mix of assets. For example, people with a higher risk appetite may be recommended a large percentage of equity, whereas people who are risk averse may be recommended more debt.

Q5.

The asset allocation calculator provides numerous benefits –

Easy to use
Asset allocation can be challenging for most investors. The asset allocation removes the complexity and provides an easy-to-understand recommendation based on a few values.

Understand diversification
You can use the asset allocation calculator as a learning tool to improve your understanding of different asset classes, their features, and how they could be a part of your portfolio. This will help you take a more informed decision about your investments

Balance risk and return
The calculator guides you to a recommended allocation of your investments across assets of different types, risks, and returns. You can use this as a starting point to understand each asset's risk and return profile and how that will fit into your overall scheme of things. It will help you balance high-return but risky assets with safer, lower-return assets.

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