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Asset Allocation Calculator

Determine optimal portfolio mix of equity, debt, gold, and cash

Recommended Asset Allocation

Equity70%

₹7,00,000

Debt/Fixed Income0%

₹0

Gold10%

₹1,00,000

Cash/Liquid20%

₹2,00,000

Investment Suggestions

Equity (70%)

• Index Funds/ETFs: 42%

• Large-cap MF: 21%

• Mid/Small-cap MF: 7%

Debt (0%)

• Debt MF/FDs: 0%

• PPF/EPF: 0%

Gold (10%)

• Gold ETF/SGBs: 10%

Expected Returns

12.20% - 15.60%

Per annum (CAGR)

Risk Level

Moderate

Volatility

Time Horizon

7+

Years recommended

Next Steps:

  • ✓ Review your current portfolio holdings
  • ✓ Calculate percentage allocation of existing investments
  • ✓ Rebalance to match target allocation within 5% tolerance
  • ✓ Review and rebalance annually or when allocation drifts >5%

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Disclaimer

This calculator is for informational and educational purposes only. It does not constitute financial or investment advice. Consult with a qualified financial advisor before making investment decisions.

What is Asset Allocation Calculator?

An Asset Allocation Calculator helps you determine the optimal mix of equity, debt, gold, and cash in your investment portfolio based on your age, risk tolerance, and financial goals. Asset allocation is the most important factor determining portfolio returns and volatility. This calculator uses proven allocation strategies including the '100 minus age' rule and adjusts for your risk profile to create a balanced, diversified portfolio that maximizes returns while managing risk appropriately.

How to Use This Calculator

  1. Enter your current age for baseline allocation
  2. Select your risk tolerance (Conservative, Moderate, or Aggressive)
  3. Choose your primary investment goal
  4. Input your total portfolio size
  5. Review recommended allocation percentages and amounts
  6. Rebalance your portfolio to match target allocation

Formula Used

Asset Allocation Formula: Base Equity % = 100 - Age (Rule of Thumb) Adjustments: • Aggressive: +20% equity • Conservative: -20% equity • Retirement goal (age >50): -10% equity, +10% debt • Short-term goal: Max 30% equity, higher cash Allocation by Asset Class: Equity Amount = Portfolio Size × Equity % Debt Amount = Portfolio Size × Debt % Gold Amount = Portfolio Size × Gold % Cash Amount = Portfolio Size × Cash %

Example Calculation

Example: 35-year-old investor Age: 35 years Risk: Moderate Goal: Wealth Building Portfolio: ₹10,00,000 Calculation: Base Equity = 100 - 35 = 65% Recommended Allocation: • Equity: 65% = ₹6,50,000 (Large-cap 40%, Mid-cap 15%, Small-cap 10%) • Debt: 25% = ₹2,50,000 (Debt MF/FD/Bonds) • Gold: 10% = ₹1,00,000 (Gold ETF/SGBs) • Cash: 0% Expected Returns: 10-12% CAGR Risk Level: Moderate volatility

Frequently Asked Questions

What is the right asset allocation for my age?

General rule: Equity % = 100 - Age. So at 30, target 70% equity; at 50, target 50% equity. However, adjust based on risk tolerance, goals, and existing assets. Younger investors can take more equity risk for higher long-term returns.

How often should I rebalance my portfolio?

Rebalance annually or when any asset class deviates by more than 5% from target allocation. For example, if target is 60% equity and it grows to 68%, rebalance by moving 8% to debt. This forces you to 'sell high, buy low' systematically.

Why include gold in portfolio?

Gold (5-15% allocation) provides: (1) Hedge against inflation, (2) Negative correlation with equities, (3) Currency depreciation protection. Invest via Gold ETFs or Sovereign Gold Bonds for tax efficiency, avoiding physical gold.

Can I have 100% equity allocation?

Possible for very young investors (20s) with long time horizons and high risk appetite. However, even young investors benefit from 10-20% debt for: (1) Portfolio stability, (2) Emergency needs, (3) Rebalancing opportunities. 100% equity is extremely volatile.

What if I'm nearing retirement?

Gradually shift to conservative allocation: 50+ years: 40-50% equity, 50-60% debt | 60+ years: 30-40% equity, 60-70% debt. This protects capital while maintaining some growth potential. Also increase emergency cash reserves to 1-2 years of expenses.

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