Portfolio Allocation Calculator

Calculate precise dollar rebalancing allocations to maintain your target portfolio risk weights.

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Target Stock Value
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Target Bond Value
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Total Allocation % Check
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Formula / Calculation
Target Asset Amount = Total Value × (Target %)

Portfolio Rebalancing Strategy

Asset allocation is the primary driver of portfolio volatility and returns. Over time, as stocks grow faster than bonds, a 70/30 portfolio might drift to 85/15, drastically increasing your risk profile without your consent. Rebalancing involves recalculating the target allocations and buying/selling assets to hit those specific percentages again.

Rebalancing Mechanics

Periodic Rebalancing

Adjusting your portfolio on a fixed schedule (e.g., annually or quarterly) regardless of minor market fluctuations. Avoids overtrading.

Threshold Rebalancing

Rebalancing only when an asset class drifts by a certain percentage corridor (e.g., drifts 5% away from its target weight).

Tax-Efficient Allocation

Avoid triggering massive taxable capital gains by redirecting new cash contributions to the underweight asset classes instead of selling out of overweight ones.

Tips for Asset Allocators

Utilize the "110-minus-age" rule as a rough generalization for your stock percentage allocation.
Hold tax-inefficient assets (like corporate bonds and REITs) in tax-advantaged accounts (IRAs/401ks).
Keep allocations incredibly simple using broad-market, low-cost index ETFs.

Frequently Asked Questions

How often should I rebalance?
Most advisors recommend rebalancing once a year, or when a major asset class drifts more than 5% off its target.
Why not just keep 100% in stocks?
While historically providing the highest returns over multi-decade timespans, 100% equity portfolios suffer massive drawdowns (e.g., -50% crashes). Bonds provide a psychological cushion and cash flow.