How to Use the Portfolio Risk Score Calculator
This tool assigns each asset class a volatility index score β cash/savings: 0, bonds: 2, REITs: 4, commodities/gold: 5, US stocks: 6, international stocks: 7, cryptocurrency: 10 β and computes the allocation-weighted average. A higher score means higher expected volatility and greater potential drawdowns.
Scores of 0β2 represent very conservative, capital-preservation portfolios. Scores of 2β4 are conservative/income, 4β6 are balanced, 6β8 are growth, and 8β10 are aggressive. As a general guideline, subtract your age from 110 to get a rough target equity percentage β the remainder in bonds and cash. The number of distinct asset classes used also indicates diversification breadth.
Frequently Asked Questions
Generally yes β risk and return are correlated over the long run. Conservative portfolios (low scores) sacrifice expected upside for stability. For long investment horizons (10+ years), accepting more volatility is typically rewarded with higher compounded returns.
US Treasury bonds, gold, and cash tend to hold value or rise when stocks fall sharply. International stocks and commodities are partially correlated but add geographic and sector diversification.
Most advisors recommend reviewing allocation once or twice a year. Rebalancing back to target weights when any asset drifts by more than 5% is a common rule. This naturally enforces buying low and selling high across asset classes.