Asset Allocator

What is it?

Asset Allocator helps you assess the likelihood of meeting your financial goals based on your current financial situation. If you find that you are not on track to meet your goals you can adjust certain criteria and immediately see the effect of your portfolio's growth potential.

Use Asset Allocator to assess the probability of reaching your retirement, education, new home, dream holiday or any other financial goals.

How does it work?

Morningstar's Asset Allocator employs standard portfolio theory to convert your inputs into the displayed results. The basis of portfolio theory is that large-cap stocks, small-cap stocks, bonds, and other types of financial assets don't always move in tandem. Therefore, if a portfolio contains a mix of these asset classes, it will have a better risk/reward profile that can be achieved with a concentration in just one of these asset classes.

Does Asset Allocator take taxes into account?

No. Expected Returns are pre-tax, because everyone's tax situation is different.

What if Asset Allocator tells me I can't meet my financial goal?

If you find that your current asset mix won't allow you to reach your goals, try favouring higher-risk but higher-returning investments, such as stocks, rather than lower-risk and lower-returning bonds and cash. Doing so will increase your Risk, but it will also improve your Expected Annual Return.

See the difference investing a little more each month can make by increasing the Annual Investment amount, and what impact investing over a longer time period has by putting off your goal for a year or two.

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