Asset Allocation Calculator ⚖️
Analyze your current **portfolio weighting** and compare it against your desired target to determine if you need to **rebalance**.
Portfolio Asset Details
Understanding Asset Allocation
**Asset Allocation** is an investment strategy that aims to balance risk and reward by adjusting the percentage of each asset class (e.g., stocks, bonds, cash) in a portfolio according to an investor's goals, risk tolerance, and investment horizon.
The Calculation
Actual Weight (%) = (Asset Value / Total Portfolio Value) × 100
Difference (%) = Actual Weight - Target Weight
A positive difference means you are **Overweight** (the asset grew and now occupies a larger portion of your portfolio), and a negative difference means you are **Underweight** (the asset shrank or lagged behind).
The Role of Rebalancing
Over time, market movements cause your actual allocation to drift from your target. **Rebalancing** involves buying and selling assets to bring the portfolio back in line with the target weights, thus maintaining your intended risk profile.