Learn/Calculators/Rebalancing and allocation
Asset allocation calculator: a textbook split by risk profile.
Choose the largest fall in a year you could sit through. The calculator works backwards to an equity, debt and gold split that would have fallen about that much.
- Formula shown
- Free, nothing stored
- Share your result as a link
01How it works
In plain words.
The calculator assumes a bad year in which equity falls 50%, gold 25% and debt 5%. It solves for the equity share whose blended fall matches your answer, keeps gold at 10% (5% for small equity shares), and caps equity on short horizons: 20% under 3 years, 40% under 5, 60% under 7.
The formula
Bad year fall = 50% x equity + 25% x gold + 5% x debtEquity = (your fall - 25% x gold - 5% x (1 - gold)) / 45%, between 10% and 90%Debt = 1 - equity - gold02Worked example
The default numbers, by hand.
A 30% fall, a 10 year horizon: equity 51%, gold 10%, debt 39%, an estimated bad year fall of 30%. The 100 minus age rule at 35 would say 65% equity.
| Input | Value |
|---|---|
| Largest fall in a year you could sit through | 30% |
| Horizon | 10 years |
| Age | 35 |
| Emergency fund in place? | Yes |
| Result | Value |
|---|---|
| Profile | Balanced |
| Equity | 51.1% |
| Debt | 38.9% |
| Gold | 10.0% |
| Estimated fall in a bad year | 30.0% |
| The 100 minus age rule says equity | 65.0% |
03Key concepts
What to know before you use it.
Capacity and tolerance
Risk profile has two parts: how much loss your finances can absorb (capacity) and how much you can sit through without selling (tolerance). The RupeeCase risk profile questionnaire asks 28 questions on both.
Rebalancing keeps the split
A split drifts as assets move. The drift calculator shows when a band rule would trade it back.
Good to know
- These are teaching numbers. A real bad year can be worse than the assumption: equity indices have fallen more than 50% from peak in past crises.
- Multi asset RupeeCase strategies hold equity, debt and gold ETFs in one index; their pages show the model, back tested drawdowns.
04Assumptions
What the calculator assumes.
- Bad year falls of 50%, 25% and 5% for equity, gold and debt; not a forecast.
- A textbook starting point for learning, not a recommendation for you.
05Questions
Asked about the Asset allocation by risk profile.
What is a good asset allocation for my age?
Rules of thumb such as 100 minus age give a starting point. The fall you can sit through and the horizon of the money matter at least as much; this calculator starts from those.
Why include gold?
Gold has often moved differently from equity in crises, which can reduce the depth of a portfolio’s fall. Module 6.9 covers the evidence.
Community
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06Keep going
Learn the idea, see it applied.
More rebalancing and allocation calculators
Education only, not investment advice. RupeeCase is a technology platform operated by QC Alpha Technologies Pvt Ltd; it is not a fund, a PMS or a SEBI registered investment adviser. Model returns are back tested and not a promise of future returns. Figures carry the date they were checked.