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Create Portfolio Template

Source: R/create_portfolio_template.R
create_portfolio_template.Rd

Creates a template for default portfolio with two asset classes:

  • GlobalStocksIndexFund

  • InflationProtectedBonds

Usage

create_portfolio_template()

Value

A nested tibble of class 'Portfolio' with columns:

  • name

  • expected_return

  • standard_deviation

  • accounts

    • taxable

    • taxadvantaged

  • weights

    • human_capital

    • liabilities

  • correlations

  • pretax

    • turnover

    • income_qualified

    • capital_gains_long_term

    • income

    • capital_gains

    • cost_basis

Details

The template is used as a starting point for creating a portfolio. The asset classes have some reasonable default values of expected returns and standard deviations of returns. The template assumes no correlations between asset classes in the correlations matrix. Please check and update the template assumptions if necessary.

The nested pretax columns contain default values for parameters needed for calculating effective tax rates. The template assumes only capital gains tax is paid. Please customise this template to your individual situation.

The accounts nested columns have zero values for all assets by default in both taxable and tax-advantaged accounts. The template assumes that there is currently no financial wealth allocated to those accounts. Please customise this template to your individual situation.

The weights nested columns define weights of assets in portfolios representative of the household human capital and liabilities. The template assumes equal weights for all assets for both portfolios. Please customise this template to your individual situation.

See also

Possible sources of market assumptions:

Examples

  portfolio <- create_portfolio_template()
  portfolio$accounts$taxable <- c(10000, 30000)
  portfolio
#> 
#> ── Portfolio ───────────────────────────────────────────────────────────────────
#> 
#> ── Market assumptions ──
#> 
#> ── Expected real returns: 
#> # A tibble: 2 × 3
#>   name                    expected_return standard_deviation
#>   <chr>                             <dbl>              <dbl>
#> 1 GlobalStocksIndexFund            0.0461               0.15
#> 2 InflationProtectedBonds          0.02                 0   
#> 
#> ── Correlation matrix: 
#>                         GlobalStocksIndexFund InflationProtectedBonds
#> GlobalStocksIndexFund                       1                       0
#> InflationProtectedBonds                     0                       1
#> 
#> ── Weights ──
#> 
#>                         human_capital liabilities
#> GlobalStocksIndexFund             0.5         0.5
#> InflationProtectedBonds           0.5         0.5
#> 
#> ── Accounts ──
#> 
#> # A tibble: 3 × 4
#>   name                    taxable taxadvantaged total
#>   <chr>                     <dbl>         <dbl> <dbl>
#> 1 GlobalStocksIndexFund     10000             0 10000
#> 2 InflationProtectedBonds   30000             0 30000
#> 3 total                     40000             0 40000
#> 
#> ── Pre-tax ──
#> 
#> # A tibble: 2 × 7
#>   name                    turnover income_qualified capital_gains_long_term
#>   <chr>                      <dbl>            <dbl>                   <dbl>
#> 1 GlobalStocksIndexFund       0.04                0                       1
#> 2 InflationProtectedBonds     0.04                0                       1
#>   income capital_gains cost_basis
#>    <dbl>         <dbl>      <dbl>
#> 1      0        0.0461      0.637
#> 2      0        0.02        0.820
#> 
#> ── After-tax ──
#> 
#> ! After-tax information is not available yet.
#> ℹ Use `calc_effective_tax_rate()` to calculate it.
#> 
#> 
#> ── Allocation ──
#> 
#> ! Allocation information is not available yet.
#> ℹ Use `calc_optimal_asset_allocation()` to calculate it.