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A New Portfolio Return Calculator
By JLP | January 16, 2007
It has been months since I last put together a calculator. My latest calculator, the Asset Allocation and Portfolio Performance Calculator, came to fruition after I put together my post about the Callan Periodic Table of Investment Returns. The returns I talked about in that post were all individual index returns. Those are fine and good but most people are more interested in how what they mean to a portfolio. So, I created a somewhat-simple portfolio calculator that will allow you to enter:
1. The amount invested
2. The number of years the money will be invested
3. The asset allocation of the portfolio in percentage form (the total MUST equal 100.00% in order for it to work correctly)
It will then show you how much the portfolio “could” be worth at the end of the number of years you entered.
Now, here’s a few of things you must understand about this calculator:
1. The returns used are the total returns over the last 20 years (1987 – 2006) as expressed in the Callan Table. For a look at the annual returns for the indexes, click here. Also, the returns over the last 20-years can be drastically different than the returns over the last few years. However, over the long-run, returns seem to revert back to average.
2. The calculator only allows for lump sum investing and DOES NOT rebalance annually.
3. The calculator does not reflect any sort of expenses since the underlying investments are the indexes themselves. In other words, the returns in the real world couldn’t be quite that high due to expenses.
I guess what I’m trying to say is my calculator isn’t perfect! However, it will give you a good idea of how different investment classes work together in a portfolio.
Now, you’re ready to try it out!
Topics: Calculators, Index Funds, Investing | 1 Comment »
January 17th, 2007 at 8:02 am
[...] A New Portfolio Return Calculator – AllFinancialMatters JLP puts together another financial calculator. It shows you what your portfolio “could” be worth. (tags: money finance calculator) [...]