60/40 Portfolio Calculator
The 60/40 portfolio holds 60% stocks and 40% bonds, a classic balanced mix. The calculator above shows its expected return, its risk, and how it might grow over time.
Enter your stock and bond amounts to see the numbers for your own money. These figures are long-run model estimates, not guarantees.
How it's calculated
A 60/40 portfolio blends the growth of stocks with the steadier nature of bonds. The calculator above weights each asset by its share of your money. Stocks are modeled at a 10% return with 16% volatility. Bonds are modeled at a 4% return with 5% volatility.
The tool then combines these to find your portfolio's expected return, its volatility, and its Sharpe ratio. The Sharpe ratio measures return earned above a 2.5% risk-free rate per unit of risk. Higher is better. The growth projection compounds your expected return over the years you choose. To try other splits, use the asset allocation calculator.
A worked example
Say you invest $60,000 in stocks and $40,000 in bonds, for $100,000 total. That is a 60% stock, 40% bond split.
The calculator shows an expected return of 7.60% and volatility of 10.00%, giving a Sharpe ratio of 0.51. Held for 30 years with no extra contributions, that $100,000 grows to about $900,260 in the model.
The lower volatility is the trade-off: you give up some return versus all stocks for a much smoother ride.
Common mistakes to avoid
- Treating the 10% stock and 4% bond figures as guaranteed. They are long-run model assumptions, and real returns vary widely year to year.
- Assuming stocks and bonds always move in opposite directions. In some years, such as 2022, both fell together and challenged the 60/40 mix; see how the mix has performed since for the fuller picture.
- Forgetting to rebalance. Without it, a rising stock market slowly pushes your mix past 60%, raising your risk. See how and when to rebalance, including the tax cost in a taxable account.
- Ignoring your time horizon. A 60/40 split may be too cautious for a young saver or too risky near a short-term goal. Compare it against a growth-tilted 70/30 or 80/20 mix, or see how allocation should shift by age in the asset allocation calculator.
- Confusing lower volatility with no risk. The 60/40 still loses money in bad years, just less than an all-stock portfolio.
Frequently asked questions
What is a 60/40 portfolio?
A 60/40 portfolio holds 60% in stocks and 40% in bonds. It is a classic balanced mix. The stocks drive growth, and the bonds add stability and income. It has long been a default starting point for everyday investors.
What return does the 60/40 portfolio calculator assume?
The calculator models stocks at a 10% return with 16% volatility and bonds at a 4% return with 5% volatility. For a 60/40 mix, that gives an expected return of 7.60% and volatility of 10.00%. These are long-run estimates, not promises.
Is the 60/40 portfolio still a good strategy?
The 60/40 portfolio remains a widely used balanced benchmark. It gives up some return versus all stocks in exchange for much lower risk. In 2022, stocks and bonds fell together, which tested the mix. It still suits many investors seeking balance.
How much can a 60/40 portfolio grow over 30 years?
In the model, $100,000 split 60/40 with no added contributions grows to about $900,260 over 30 years. This uses a 7.60% expected return. Actual results will differ because real markets rise and fall.
Why hold bonds instead of all stocks?
Bonds are generally less volatile than stocks but offer more modest returns, per SEC guidance. Adding 40% bonds lowers the 60/40 portfolio's volatility to 10.00%, well below an all-stock mix. That trade buys you a smoother path for less return.
Is the 60/40 portfolio good for retirement?
It can be, but retirees typically weight it differently than someone still saving. The 60/40 split is often used during the working years for growth with some stability; near or in retirement, many investors shift toward more bonds to reduce how much a downturn can shrink withdrawals. Use the asset allocation calculator to test a more conservative mix against your own retirement timeline. If you'd rather not manage that shift by hand, a target-date fund automates it; see how that approach compares in our target-date fund vs. S&P 500 comparison.
Are there fees for running a 60/40 portfolio?
A 60/40 split has no fee of its own. The cost comes from the expense ratio of the stock and bond funds you use to build it, plus any brokerage trading fees. Low-cost, broad index funds keep this cost small, but expense ratios vary by fund, so check them before you buy.
Does a 60/40 portfolio protect against inflation?
A 60/40 portfolio offers only partial inflation protection. Stocks have historically outpaced inflation over long stretches, but bonds are more exposed, since their fixed interest payments buy less when prices rise unexpectedly. Some investors offset this by shifting part of the bond allocation into inflation-linked bonds like TIPS.
Sources
We prioritize primary sources for rules, formulas, rates, limits, and definitions. See our calculator methodology and editorial policy.