Calculator Inputs
Example Data Table
Use this sample as a starting structure for testing allocation limits, expected returns, and rebalance gaps.
| Asset | Current % | Expected Return % | Risk | Liquidity | Priority | Min % | Max % |
|---|---|---|---|---|---|---|---|
| Equities | 35 | 13.0 | 8 | 7 | 9 | 25 | 50 |
| Bonds | 25 | 7.0 | 3 | 9 | 8 | 15 | 35 |
| Cash | 15 | 4.2 | 1 | 10 | 6 | 5 | 20 |
| Alternatives | 15 | 11.0 | 7 | 4 | 7 | 5 | 20 |
| Real Estate | 10 | 9.0 | 6 | 5 | 7 | 5 | 25 |
Formula Used
1. Reserve amount
Reserve Amount = Total Capital × (Reserve % ÷ 100)
2. Investable capital
Investable Capital = Total Capital − Reserve Amount
3. Safety score
Safety Score = 11 − Risk Score
4. Composite asset score
Composite Score = (Normalized Return × Return Weight) + (Priority × Priority Weight) + (Liquidity × Liquidity Weight) + (Safety Score × Safety Weight)
5. Target allocation logic
Each asset starts at its minimum allocation. Remaining percentage is distributed by composite score while respecting each maximum cap.
6. Target amount
Target Amount = Investable Capital × (Target Allocation % ÷ 100)
7. Rebalance gap
Rebalance Gap = Target Amount − Current Amount
8. Portfolio expected return
Portfolio Return = Sum of (Target Weight × Asset Expected Return)
How to Use This Calculator
- Enter your total capital and reserve percentage first.
- Choose a risk tolerance profile that matches your allocation style.
- Set a target portfolio return, hurdle rate, and rebalance threshold.
- For each asset, enter current weight, expected return, risk, liquidity, priority, and allocation limits.
- Submit the form to generate recommended target weights and capital amounts.
- Review the rebalance gap, trade trigger, portfolio return, and chart.
- Download the result as CSV or PDF for reporting.
Planning note: This model supports allocation planning. It does not predict market outcomes and should not replace professional portfolio advice.
FAQs
1. What does this calculator measure?
It estimates target capital distribution across asset classes using return assumptions, risk, liquidity, strategic priority, reserve needs, and allocation constraints.
2. Why are minimum and maximum allocations important?
They stop the model from underfunding critical assets or overconcentrating capital in one area. This keeps recommendations practical and policy-friendly.
3. What changes when I switch risk tolerance?
The scoring weights change. Conservative settings reward safety and liquidity more, while aggressive settings reward expected return more heavily.
4. Why can current allocations be normalized?
If your current percentages do not total 100, the calculator rescales them so rebalance gaps remain comparable against the target portfolio.
5. What is the hurdle rate used for?
It gives you a minimum acceptable return benchmark. The tool compares projected portfolio return against that level to show surplus or shortfall.
6. How should I use the rebalance threshold?
Set the smallest percentage gap that justifies action. Larger thresholds reduce trading frequency, while smaller thresholds make the plan more responsive.
7. Does a higher expected return always mean a bigger allocation?
No. Allocation also depends on liquidity, risk, priority, minimums, maximums, and your selected tolerance profile.
8. Can I use this for real investment decisions?
Use it as a planning framework, then validate assumptions, costs, taxes, and compliance rules before committing capital.