equitytobond
Equitytobond is a term used in finance to denote the equity-to-bond ratio of an investment portfolio. It describes the relative exposure to equities (stocks) versus fixed-income securities (bonds). The ratio is typically calculated as the market value of equities divided by the market value of bonds. For example, a portfolio with 60,000 in equities and 40,000 in bonds has an equitytobond of 1.5. Equivalently, this can be expressed as a 60/40 equity-to-bond allocation, or as percentages (60% equities, 40% bonds).
The metric serves as a simple proxy for risk tolerance and time horizon in asset allocation frameworks.
However, equitytobond captures only two asset classes and ignores diversification within them, currency risk, inflation exposure,
Related concepts include asset allocation, balanced funds, target-date funds, risk parity, and glide paths. In practice,