Investment Portfolio Analyzer — Free AI Portfolio Review

Decades of research — most famously the Brinson, Hood and Beebower studies — find that asset allocation (the mix of stocks, bonds, cash and alternatives) explains roughly 90% of a portfolio's return variability over time. Stock selection and market timing together account for less than 10%. That is why almost every reputable advisor starts with allocation, not with which fund is hot this quarter.

A simple framework: subtract your age from 110 to get a rough target stock percentage. A 35-year-old aims for ~75% stocks; a 60-year-old, ~50%. Adjust up if you have a long horizon and high risk tolerance, down if you cannot sleep through a 30% drawdown. The Investment Portfolio Analyzer compares your current allocation to a target derived from your age, goals and risk tolerance, then quantifies the gap.

The single most common mistake the analyzer surfaces is concentration risk — too much money in one company, one sector or one geography. A 25% allocation to your employer's stock might feel loyal, but you already depend on that company for your salary; if it falters, you lose both your job and your savings at the same time.

A reasonable upper bound: no single stock above 5–10% of your portfolio, no single sector above 25–30%, and at least 20–30% in international equities for a US-based investor. If a position grew past your limit because it performed well, congratulations — but trim it back. The hardest part of investing is selling winners, and it is exactly what diversification requires.

Where you hold an asset matters almost as much as which asset you hold. Bonds and REITs throw off taxable income (interest and ordinary dividends) every year, so they belong in tax-advantaged accounts — your 401(k), traditional IRA, or Roth IRA — where that income compounds tax-deferred or tax-free. Index ETFs are extremely tax-efficient because they rarely distribute capital gains, so they are ideal for taxable brokerage accounts.

The rule of thumb: hold tax-inefficient assets in tax-advantaged accounts, hold tax-efficient assets anywhere. Done across a $300k portfolio, this 'asset location' optimisation can add 0.3–0.7% per year to after-tax returns — over 30 years, that is the difference between retiring with $1.5M and $2.0M.

Rebalancing forces you to sell high and buy low, but doing it too often racks up trading costs and taxes in a brokerage account. The simplest sustainable rule: rebalance when any asset class drifts more than 5 percentage points from its target, or once a year on a fixed date — whichever comes first. In tax-advantaged accounts you can rebalance freely; in taxable accounts, prefer to redirect new contributions toward the under-weight asset rather than selling the over-weight one.

During big market moves, your discipline matters most. After a 30% crash, every instinct will scream sell — but rebalancing back to your target means buying stocks at a discount. After a long bull run, every instinct will scream let it ride — but rebalancing means trimming and locking in gains. The Portfolio Analyzer gives you specific, dollar-denominated trades to bring you back to target, removing the emotion from the decision.