Custom Asset Allocation

Frequently asked

How do I pick my stock/bond ratio?

Rule of thumb: 110 − age = stock %. Age 30 → 80% stocks / 20% bonds; age 60 → 50/50. Higher risk tolerance and longer horizon → tilt to stocks. The real test is whether you can ride out a 30% drawdown without panic selling — if not, lower the stock allocation, or you'll sell at the bottom.

Why is 60/40 the classic?

Historically delivered the best risk-adjusted return: stocks for growth, bonds for volatility cushion. 1926-2024 ≈ 8% nominal annualized with a max drawdown of −30% (2008), much milder than 100% stocks (−50%). The last decade's low rates weakened the bond hedge, so some now favor 70/30 with inflation-protected assets added.

Are gold and crypto worth holding?

Gold: ~1-2% long-run real return; main role is crisis hedge (stagflation, war, currency debasement). Cap allocation at ≤ 10%. Crypto: 60-80% annualized volatility, no long-run history. If you allocate, keep it 1-5% and treat it as gambling money — it shouldn't affect the overall plan.

Are REITs stocks or bonds?

Neither, exactly. REITs are securitized real estate: (1) 0.5-0.7 correlation with equities (moderate), (2) good inflation hedge, (3) high distribution yield (4-7%). Long-run returns approach equities with similar volatility. Treat as a separate bucket at 5-15%, not bundled with stocks or bonds.

How often should I rebalance?

Two camps: (1) calendar-based — annually or semi-annually, simple and disciplined; (2) threshold-based — only when allocation drifts ≥ 5% from target, studies show slight return edge. Practical hybrid: review every January and only rebalance if drift ≥ 5%, to avoid tax and transaction costs. Taiwan ETF rebalancing triggers dividend tax — factor it in.

Does the tool store my allocation?

No. All percentages and amounts are computed locally in your browser.