Which allocation fits you

How this is calculated

What it calculates

A rough suggestion for how much of your money suits volatile investments (such as equity ETFs) and how much should stay safe. Based on your time horizon, loss tolerance and experience. Not investment advice.

Your inputs

• Amount to invest: excluding your emergency fund.
• When do you need the money?: your time horizon.
• How big a drop can you take?: how much of a loss you can sit through without selling.
• Experience with a drop (whether you have lived through a fall of more than 20%) and what you did.

The calculation

1. With a horizon under three years, the calculator stops: that money does not belong in volatile investments.
2. Cap from time: 3 to 10 years → 45%, 10 to 20 years → 75%, over 20 years → 90%.
3. Cap from loss tolerance: the assumption is that the volatile part can fall by 50% in a bad scenario. Share = tolerated drop ÷ 50% (10% → 20%, 25% → 50%, 40% → 80%, 60% → 100%).
4. The lower of the two caps applies.
5. Experience: sold during a past drop → × 0.7. Held on → × 1.1, but never above the time cap.
6. The result is rounded to the nearest 5%.

Volatile share in € = amount × share
Expected drop in a bad scenario = share × 50%

What the result means

The share is the ceiling at which you are likely to sit through a severe crash without panic selling. The drop in the last line refers to your whole amount. That is how a crash would feel in your portfolio. The 50% is a cautious assumption, not a guarantee for the worst case.

Example

Default values: €20,000, money needed in 10 to 20 years (cap 75%), a drop of around 25% is bearable (cap 50%), no experience. 50% applies: €10,000 volatile, €10,000 safe. In a bad scenario, about −25% on the total.