Portfolio Calculator
This portfolio calculator estimates your investment mix's expected return, risk, and long-term growth from how your money is split across stocks, bonds, real estate, and cash. Enter your holdings in the calculator above to see your projected return, volatility, and Sharpe ratio in seconds. The figures use long-run historical averages as model assumptions, so treat them as estimates, not guarantees. Use it to test how shifting your asset mix changes the balance between reward and risk.
Portfolio calculators
How it works
The portfolio calculator turns your asset mix into three core numbers: expected return, volatility, and the Sharpe ratio. Expected return is the weighted average of each asset class's long-run estimate. Volatility measures how much your value may swing year to year, and it accounts for how assets move together. Because stocks and bonds often move differently, holding both lowers volatility more than it lowers return. That is diversification, sometimes called the only free lunch in investing.
The Sharpe ratio equals expected return minus the 2.5% risk-free rate, divided by volatility, so it rewards return per unit of risk. A 100% stock mix has a higher expected return but usually a worse Sharpe ratio than a diversified mix. Take a balanced $100,000 portfolio of $60,000 stocks, $30,000 bonds, and $10,000 cash, contributing $500 a month. It shows a 7.45% expected return, 9.87% volatility, and a 0.50 Sharpe ratio. These outputs rest on model assumptions drawn from historical averages, so they are estimates, not promises of future results. Dig deeper with the asset allocation calculator and the portfolio risk calculator.
Frequently asked questions
What does this portfolio calculator do?
This portfolio calculator analyzes your asset mix to estimate expected return, risk, and long-term growth. You enter how much you hold in stocks, bonds, real estate, and cash. It then returns a weighted expected return, a portfolio volatility figure, and a Sharpe ratio. To go deeper on any one piece, try the asset allocation calculator or the expected return calculator.
How does diversification lower my risk?
Diversification lowers risk by spreading money across assets that do not move together. The SEC notes that diversification can limit losses when one investment falls but others hold up. Because stocks and bonds often move in different directions, a blended portfolio swings less than a single asset class. This is why volatility can drop more than expected return, giving you a better risk-adjusted result.
What is a good Sharpe ratio?
A higher Sharpe ratio is better because it means more return per unit of risk. The example balanced portfolio above shows a Sharpe ratio of 0.50. A 100% stock mix may earn a higher expected return but often posts a lower Sharpe ratio, since its risk rises faster than its reward. Use the portfolio risk calculator to compare risk-adjusted results across mixes.
Are the return and risk figures guaranteed?
No, the figures are estimates, not guarantees. They use long-run historical averages as model assumptions, such as 10% expected return for stocks and 4% for bonds. Real markets vary widely from year to year, and past performance does not predict future results. In the example, a typical year for the balanced portfolio could range from about $97,583 to $117,317.
What growth can a balanced portfolio show over time?
Growth depends on your mix, contributions, and time horizon. In the example, a $100,000 balanced portfolio with $500 monthly contributions projects to about $679,255 over 20 years. Of that total, $220,000 is contributions and $459,255 is estimated growth. The classic 60/30/10 split is close to a 60/40 portfolio calculator mix, and you can compare more tools on our calculators page.