Allocation Balancing with New Money – Version 04.2003b

All Data Entry cell characters are shown in red.

This model is designed to assist an investor determine the allocation of new money which is being deposited in a “non-qualified” (non-retirement) portfolio. This model assumes that existing portfolio dollars will stay in its current position. Keep in mind that reallocating existing dollars in an account that is not tax deferred may trigger a taxable event. This worksheet seeks to allocate new money proportionately over the various asset classes that are deficient in an effort to move toward a “target” allocation of funds across all of the classes.

In this model the user will indicate the amount of the new-money being deposited, define the current asset classes and the allocation of funds in each, and define the target portfolio allocation.

For the users convenience the model includes some sample portfolios on the far right of the worksheet. Click on the button for the sample you wish to see and the worksheet will import a guideline allocation in that column for that portfolio selected. The example portfolio section also allows you to override the built in portfolio examples by selecting the custom portfolio button. When this button is selected the content in the example portfolio section matches all content you enter in the far left (Asset Class) column as well as the target portfolio percentages entered in column G. If the user selects any of the example portfolios they reflect the built in data. If you select the Custom option all of the data then matches all of your data entry in the columns mentioned.

Data Entry:

Expected Account Addition (New Money): Enter the dollar amount of the new money being added to the portfolio.

Asset Classes: List the names of all of the asset classes that are, or will be in the portfolio. The model accommodates up to eight asset classes.

Current Portfolio Dollar Amounts: List the amount of funds that are currently in each of the asset classes. The calculator will then indicate the percentage of funds that each dollar amount represents.

Target Portfolio Percentages: Enter the allocation that you are attempting to achieve.

The calculator then outlines the recommended allocation of the new money the user should consider for each asset class to move as close to the target portfolio as possible. At the bottom of the worksheet you will see a graphical view of each portfolio.