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About

Managing a diversified portfolio requires more than checking individual stock tickers. This tool calculates the aggregate performance of a mixed basket of assets, providing a single Weighted Average Return metric. This is essential for understanding how a heavy loss in a small position or a small gain in a large position affects overall wealth. It is designed for self-directed investors balancing equities, fixed income, and cryptocurrencies.

The calculator aggregates the total invested capital versus the current market value to derive the absolute return. Additionally, by inputting the holding period, it computes the Compound Annual Growth Rate (CAGR), smoothing out volatility to show the effective annual accumulation rate. This helps in benchmarking personal performance against standard indices like the S&P 500.

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Formulas

The Total Portfolio Return is calculated by summing the current value of all assets and comparing it to the total initial investment:

Rtotal = ni=1 Vcurrent,ini=1 Vinvested,i 1

If a holding period t (in years) is provided, the Compound Annual Growth Rate (CAGR) is derived:

CAGR = (VfinalVinitial)1t 1

Reference Data

Asset ClassHistorical Avg Return (Nominal)Risk LevelRecommended Allocation (Conservative)Recommended Allocation (Aggressive)
Large Cap Stocks (US)10.0%Medium30%50%
Small Cap Stocks11.8%High5%20%
Intl. Developed Stocks8.4%Medium10%20%
Corporate Bonds (Inv. Grade)5.5%Low30%5%
Government Bonds (10Y)4.8%Very Low20%0%
Real Estate (REITs)9.2%Med-High5%5%
Commodities / Gold4.0%High0%5%

Frequently Asked Questions

Simple Return calculates the total percentage growth over the entire period, regardless of time. CAGR (Compound Annual Growth Rate) calculates what the annual growth rate would have been if the investment grew at a steady rate every year. CAGR is better for comparing investments held for different lengths of time.
This tool calculates a Money-Weighted Return based on the total invested vs. current value. While it accurately reflects your personal profit, it does not account for the timing of cash flows (deposits/withdrawals) in the same way a strict Time-Weighted Return (used by fund managers) would.
A 50% gain in an asset that makes up only 1% of your portfolio has a negligible impact on your total wealth. Conversely, a 10% drop in an asset comprising 80% of your portfolio is significant. Calculating the weighted average ensures you focus on the positions that actually move the needle.