1. What is Portfolio Weight?

Portfolio weight represents the proportion of a single asset's value relative to the total value of the investment portfolio. It helps investors understand how much of their portfolio is allocated to a particular investment.

2. How Does the Calculator Work?

The calculator uses the portfolio weight formula:

Where:

• Value Asset — Current market value of the specific asset
• Total Portfolio Value — Sum of all assets in the portfolio

Explanation: The formula calculates what percentage of the total portfolio is represented by a single asset.

3. Importance of Portfolio Weight

Details: Portfolio weights are essential for asset allocation, risk management, and rebalancing strategies. They help investors maintain their desired risk-return profile.

4. Using the Calculator

Tips: Enter the current value of the asset in USD and the total value of your portfolio in USD. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between weight and allocation?
A: Weight shows current proportions, while allocation refers to target proportions set in an investment strategy.

Q2: How often should I check portfolio weights?
A: For most investors, quarterly checks are sufficient, unless market conditions are particularly volatile.

Q3: What's considered a well-balanced portfolio weight?
A: This depends on your risk tolerance and investment goals, but diversification across asset classes is key.

Q4: Should I include cash in total portfolio value?
A: Yes, cash is part of your portfolio and should be included in the total value calculation.

Q5: How do I use weights for rebalancing?
A: Compare current weights to your target allocation, then buy/sell assets to bring them back in line.