Investment Portfolio Calculator

Asset Allocation

Asset allocation is the practice of dividing investments among different asset categories to balance risk and reward based on your goals, risk tolerance, and time horizon.

Common Allocation Strategies

• Aggressive (90/10/0): 90% stocks, 10% bonds, 0% cash - for long-term growth
• Moderate (70/20/10): 70% stocks, 20% bonds, 10% cash - balanced approach
• Conservative (40/40/20): 40% stocks, 40% bonds, 20% cash - lower risk
• Age-Based Rule: Bonds % = your age (e.g., at 30, hold 30% bonds)

Key Investment Principles

• Dollar-Cost Averaging: Regular contributions reduce timing risk
• Compound Growth: Returns generate additional returns over time
• Diversification: Spread risk across different asset types
• Rebalancing: Periodically adjust to maintain target allocation
• Long-Term Focus: Stay invested through market volatility
• Tax Efficiency: Use tax-advantaged accounts when possible

Historical Returns (Average Annual)

• U.S. Stocks: ~10% (1926-2023)
• U.S. Bonds: ~5% (1926-2023)
• Cash/Money Market: ~3% (1926-2023)
• Inflation: ~3% (1926-2023)