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Portfolio risk calculator

Portfolio risk calculator

Risk profile Dynamic expected return 5.2%/year
Volatility (risk)
9.2%
Typical annual range
-4% to 14.4%
Approximate bad year
-13.2%

Estimate using rough historical assumptions (stocks ≈ 7% return, 15% volatility; bonds ≈ 2.5% return, 5% volatility). Actual return and risk vary. This is not financial advice.

This portfolio risk calculator estimates the expected return, volatility and typical annual range of a portfolio, from the percentage split between stocks and bonds.

More stocks, more return — and more risk

Shifting a portfolio’s mix toward stocks raises its expected return but also its volatility: the typical swing between a good year and a bad one gets wider. A 60% stocks / 40% bonds mix, for example, lands in the “dynamic” risk profile, with a meaningfully wider range than a more bond-heavy portfolio.

Read the range, not just the average

The expected return is only the middle of a range. The typical annual range (expected return ± volatility) and the approximate bad-year figure (expected return − 2× volatility) show what a single year could realistically look like, good or bad. This is an estimate based on historical assumptions, not a guarantee, and isn’t financial advice.

FAQ

What assumptions does this calculator use?
Rough long-term historical assumptions: stocks (equities) return about 7% a year with 15% volatility, and bonds (fixed income) return about 2.5% with 5% volatility. Actual results vary by market and period.
How is expected return calculated?
As the weighted average of each asset's return, based on the percentage of stocks and bonds in the portfolio. A 60/40 stocks/bonds mix blends 7% and 2.5% weighted by those percentages.
Why does more stocks mean more risk?
Stocks historically swing far more from year to year than bonds. Raising the stock percentage raises expected return, but it also widens the typical annual range — including how bad a bad year can be.