Asset Allocation CalculatorMethodology
How this calculator actually works
Most allocation calculators are a black box: answer some questions, get a number, no explanation. Here's exactly how ours turns your answers into a recommendation — so you can judge it, not just trust it.
1. Risk score
Your time horizon, reaction to a hypothetical 20% drop, investing experience, and income stability combine into a 0–100 score. Horizon carries the most weight, because time-in-market is the single strongest driver of how much short-term volatility a plan can absorb. Goals with an inherently short fuse — an emergency fund, or a major purchase inside three years — cap the score regardless of your other answers, because that money has a job to do soon and shouldn't be exposed to a market downturn at the wrong moment.
2. Risk profile & base allocation
The score maps to one of five profiles, each with a strategic base allocation for a long (15+ year) horizon:
3. The glide path
If your horizon is under 15 years, we ease your allocation from the base mix toward a capital-preservation mix (10% equities / 35% bonds / 3% real estate / 7% gold / 45% cash) as the goal date approaches, using a smoothed curve rather than a sudden jump. This is the same idea behind target-date retirement funds, made explicit instead of hidden inside a fund's fact sheet — the calculator charts it directly, year by year, alongside your results.
4. Asset classes, not products
Every recommendation is expressed as a percentage across five broad asset classes:
Equities
Ownership stakes in companies, domestic and international. Highest long-term growth potential and highest short-term volatility.
Bonds & fixed income
Loans to governments or companies that pay interest. Historically steadier than equities, with lower expected long-run returns.
Real estate
Property or property-backed instruments such as REITs. Tends to track inflation with moderate volatility.
Gold & commodities
Tends to hold value when currencies or markets are under stress; historically low correlation to equities.
Cash & equivalents
Bank deposits, money-market instruments, short-term government bills. Capital stability and liquidity, minimal growth.
We deliberately stop there. We do not name, rank, or recommend any specific stock, ETF, mutual fund, index, or provider — how you fill each asset class (a low-cost index fund, individual bonds, a robo-advisor, a human advisor) is your decision, informed by your own research or a licensed professional.
5. Rebalancing
If you tell us your current mix, we flag any asset class that has drifted 5 percentage points or more from target. A common rule of thumb is to review your allocation at least once a year, or whenever drift crosses that kind of threshold — not to react to daily market moves.
This page describes the logic behind an educational tool. It is not financial, investment, tax, or legal advice, and nothing here should be read as a recommendation to buy, sell, or hold any specific security, fund, or product.