How Should I Allocate My Assets?

Over 90 percent of investment returns are determined by how investors allocate their assets versus security selection, market timing and other factors.* Use this calculator to help determine your portfolio allocation based on your propensity for risk.

* Source: Brinson, Singer, and Beebower, "Determinants of Portfolio Performance II: An Update," Financial Analysts Journal, May–June 1991
     
  Attitudes toward Risk

Input
1. What is your age?

A) 35 years or under
B) 36-54
C) 55 or above

 A
B
C
2. What do you expect to be your next major expenditure?

A) Buying a house
B) Paying for a college education
C) Capitalizing a new business
D) Providing for retirement

 A
B
C
D
3. When do you expect to use most of the money you are now accumulating in your investments?

A) At any time now...so a high level of liquidity is important
B) Probably in the future...2-5 years from now
C) In 6-10 years
D) Probably in 11-20 or more years from now

 A
B
C
D
4. Over the next several years, you expect your annual income to:

A) Stay about the same
B) Grow moderately
C) Grow substantially
D) Decrease moderately
E) Decrease substantially

 A
B
C
D
E
5. Due to a general market correction, one of your investments loses 14% of its value a short time after you buy it. What do you do?

A) Sell the investment so you will not have to worry if it continues to decline
B) Hold on to it and wait for it to climb back up
C) Buy more of the same investment...because at the current lower price, it looks even better than when you bought it

 A
B
C
6. Which of these investing plans would you choose for your investment dollars?

A) You would go for maximum diversity, dividing your portfolio among all available investments, including those ranging from highest return/greatest risk to lowest return/lowest risk
B) You are concerned about too much diversification, so you would divide your portfolio among two investments with historically high rates of return and moderate risk
C) You would put your investment dollars in the investment with the highest rate of return and most risk

 A
B
C
7. Assuming you are investing in a stock mutual fund, which one do you choose?

A) A fund of companies that may make significant technological advances that are still selling at their low initial offering price
B) A fund that only invests in established, well-known companies that have a potential for continued growth
C) A fund devoted to highly diversified “blue chip” stocks that pay dividends

 A
B
C
8. Assuming you are investing in only one bond, which bond do you choose?

A) A high-yield (junk) bond that pays a higher interest rate than the other two bonds, but also gives you the least sense of security with regard to a possible default
B) The bond of a well-established company that pays a rate of interest somewhere between the other two bonds
C) A tax-free bond, since minimizing taxes is your primary investment objective

 A
B
C
9. You expect inflation to return and it has been suggested that you invest in “hard” assets such as real estate and cable TV, which have historically outpaced inflation. Your only financial assets are long-term bonds. What do you do?

A) Ignore the advice and hold on to the bonds
B) Sell the bonds, putting half the proceeds in “hard” assets and the other half in money market funds
C) Sell the bonds and put all the proceeds in “hard” assets
D) Sell the bonds, put the proceeds in “hard” assets, and borrow additional money so you can buy even more “hard” assets

 A
B
C
D
10. You have just reached the $10,000 plateau on a TV game show. Now you must choose between quitting with the $10,000 in hand or betting the entire $10,000 in one of three alternative scenarios. Which do you choose?

A) The $10,000 — you take the money and run
B) A 50 percent chance of winning $50,000
C) A 20 percent chance of winning $75,000
D) A 5 percent chance of winning $100,000

 A
B
C
D
     
 

Any rate of return entered into the calculator to project future values should be a reasonable average return for the period. Rates of return will vary over time, and generally the higher the rate of return the higher the degree of risk.

The information provided here is to assist you in planning for your future. The accuracy of this calculator and its applicability to your circumstances is not guaranteed. Any analysis is a result of the information you have provided. Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please not that individual situations can vary. Therefore, the information should be relied upon when coordianted with individual advice from qualified professionals.