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Home > Tax Tools & Calculators > Portfolio Diversification Calculator Last Updated: Feb 26th 2025

Portfolio Diversification Calculator

The portfolio diversification is a way to balance risk and reward in your investment portfolio by diversifying your assets to various asset classes.

The EZTax portfolio diversification calculator diversifies assets by age and ROI. Provide an asset allocation strategy for your portfolio to achieve your financial goals using the following asset classes.

This calculator is built for the Indian investors in mind as they have access to an array of investments such as real estate, gold, metals beyond typical stock market oriented recommendations.

Asset ClassType of GrowthLiquidityPride / Confidence
  • Liquid Cash
StableHighMedium
  • Government-backed (PPF, EPF, NSC, SSY)
StableMediumMedium
  • Mutual Funds
BalancedHighLow
  • Stocks
BalancedHighLow
  • Gold (Physical/Digital, Coins, Jewellery, Metals, ETFs, SGBs)
BalancedLow*High*
  • Real Estate (Land, Plot, Flat, Apartment, Villa)
AggressiveLowVery High
  • REIT / Derivatives / Crypto
Extremly AggressiveLowLow
  • New age investments (PMS, Startup, Group / P2P lending)
Extremly AggressiveLowLow

* Only Physical Gold or Jewellery do have high liquidity.

Portfolio Diversification Calculator from EZTax
   Portfolio Diversification Calculator
Investor Age

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Portfolio Value

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ROI Expectation

Click on the pie chart to see the details.

{{aClassPer}}%
Liquid Cash
Government-backed (PPF, EPF, NSC, SSY)
Mutual Funds
Stocks
Gold (Physical/Digital, Coins, Jewellery, Metals, ETFs, SGBs)
Real Estate (Land, Plot, Flat, Apartment, Villa)
REIT / Derivatives / Crypto
New age investments (PMS, Startup, Group / P2P lending)
  • Liquid cash refers to the portion of investment that is held in cash or cash-equivalent assets like bank FDs, post office RDs, which can be quickly and easily converted into cash without significant loss of value
  • Liquid cash helps in meeting emergencies
  • Liquid cash don’t give any major returns when compared to other types of investments
  • Interest earned on liquid cash (Bank interest) is taxable
  • Government backed instruments refer to EPF, PPF, NSC, SSY etc.
  • As these are backed by Government, investment in these instruments will come with stable growth, medium liquidity and medium confidence.
  • Interest earned on the most of government backed instruments are taxable except PPF and SSY.
  • Returns from Government backed might not beat inflation and most of the instruments under this category are lock in period based.
  • Mutual Funds is a type of investment that comes with balanced growth, high liquidity and low confidence.
  • The returns of mutual fund depends on type of funds like equity, debt and hybrid funds, as the underlying assets are such.
  • The returns from mutual funds can be higher when compared to Government backed instruments but there is a chance of loss of capital also.
  • Regular review of portfolio and rebalancing is required at regular intervals.
  • Returns from Mutual funds (Capital gains and dividends) are taxable.
  • Investments in stocks comes with balanced growth, high liquidity and low confidence.
  • There can be high volatility in the stock prices due to various factors like market sentiment, economic conditions, or company-specific news.
  • Stocks can give higher returns but there are also high chances of capital erosion.
  • You can diversify your stock investment by investing in different sectors of stocks.
  • Regular review of portfolio and rebalancing is required at regular intervals.
  • Returns from stocks (capital gains and dividends) are taxable.
  • Investment in gold comes with balanced growth, low liquidity and high confidence.
  • Investment in gold is considered as a safe asset and hedge against inflation and economic uncertainty.
  • The physical gold might not generate any returns during the holding period.
  • The chances of capital erosion in gold is very negligible and gold can perform well in long term.
  • The returns received from gold / metals is taxable (capital gains).
  • Investment in real estate comes with Aggressive Growth, low liquidity and very high confidence
  • Real Estate provides a sense of security to family and investment in residential houses, villas or flats can give steady income in the form of Rental. However same might not be applicable for land or plots
  • Investment in real estate is more location prioritized and the property value and rental income can rise with inflation
  • Real estate is a powerful investment (and a dream for many Indians) for long-term wealth creation, steady income, and portfolio diversification in the long term.
  • The returns received from real estate is taxable (capital gains and rental income)
  • Investment in REIT / Derivatives / Crypto comes with extremely aggressive growth, low liquidity and low confidence.
  • Investment in these assets have very high risk when compared to other investments.
  • There are chances of high returns but there is a chance of capital erosion also.
  • The returns from these are also taxable.
  • Investments in new age investments like P2P, startup etc comes with extremely aggressive growth, low liquidity and low confidence
  • New age investments can be an attractive option for high returns and portfolio diversification, but it comes with significant risks, including defaults and platform failures.
  • Detailed research is required before investing as there are chances of fraud
  • The returns from these are also taxable
Recommended Portfolio Diversification for your age @ {{age}}

Asset Class% of AllocationAllocation Amount *Reason for Allocation?
{{ rec[0] }} {{ rec[1] }} % {{ (rec[1]*portFolioValue/100).toLocaleString("en-IN") }} {{ rec[2] }}

While every investment carry some amount of risk, and an expense, the idea of this calculator is to provide a balanced view based on the experiences we had over the time.

While we focused on taxes, our goal is to involve crores of Indians in financial inclusion and wellbeing.
We hope this calculator is useful to you. Please share on
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Frequently asked Questions

1. What is a Portfolio?

A portfolio is a group of investments. In order to accomplish particular financial objectives, such as increasing wealth, producing income, or protecting capital, the aim is to group all of the investments together.

2. What kind of investments can be a part of a portfolio?
  1. The liquid cash is one of the financial assets that can be included in a portfolio to stabilise the investment from risk.
  2. Government-backed PPF, EPF, NSC, SSY etc.
  3. Stocks, mutual funds and other money market funds.
  4. Real estate (land, plot, flat, apartment, villa)
  5. Gold (physical or digital), coins, jewellery, metals, ETFs, SGBs,
  6. REIT, derivatives, and cryptocurrency
  7. Investments of the new era such as PMS, Startup investments, Group / P2P financing
3. What is diversification of portfolio?

To lower risk, the portfolio should be distributed among several asset classes.

Even if one investment loses money, the other investments may continue to increase or remain stable, keeping the portfolio as a whole is balanced against a portfolio objective.


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Disclaimer: This article provides an overview and general guidance, not exhaustive for brevity. Please refer Income Tax Act, GST Act, Companies Act and other tax compliance acts, Rules, and Notifications for details.