Asset allocation Calculator
Everything in our lives seeks balance; too much of anything may increase risk. The same is the case with your investments. If you sway too much towards one asset class, you are putting too many eggs in one basket. Here comes into the picture- asset allocation.
Asset allocation is one of the most effective investment strategies to balance risk and returns in an investment portfolio. It allocates various assets in a portfolio according to your financial objectives, risk profile, and
The asset classes considered for asset allocation are equity, fixed-income, gold and real estate, etc. Each asset class has
different levels of risk and potential returns. Therefore, returns on each asset fluctuate differently over time. As their risks differ, so do their returns. And hence, the need for asset allocation, so that your risks and
returns get averaged out.
For Asset Allocation like a financial planner, what you need to do is:
- Assess your risk tolerance level.
- Determine your Investment Goals
- Identify your Time Horizon.
- Select asset classes to suit your requirements.
Here is a quick way to calculate your asset allocation - Asset Allocation Calculator.
Asset Allocation Calculator
Asset Allocation Calculator is a ready-to-use tool that you can use to get an appropriate asset allocation. You need to enter your current age, level of risk you can take (from very low to very high), investment horizon in years, and the choice from mid,
small and large companies.
Based on your choices, the calculator will create a profile and suggest the ideal asset allocation for you, for example, 55% in debt and 45% in equity. Against popular opinion, asset allocation is not just about equities. An
investment planner looks at the risk level of each asset class while allocating a target percentage to each. There should be a perfect mix of assets
in a balanced way. However, you need not be an expert. The asset allocation calculator takes care of asset allocation for you. It does not make recommendations; the outcome is only a suggestion.