At Halpern Financial, we love numbers and data. (You may have guessed.) We especially love when data is presented in a way that makes it easy for anyone to feel excited about personal finance, so we found a few examples that illustrate financial concepts in a creative way.
Lesson 1: View Your Assets from a Global Perspective
This infographic shows how much money there is in the world, using $100 billion increments to compare different types of assets and markets. Note the biggest and smallest players in the financial world!
The U.S. stock market makes up the lion’s share of global stock markets, but when you see the size of other countries’ markets, it should illuminate the need to have global exposure.
Scroll down further in the infographic to find that the entire global stock market is dwarfed by global debt. And a surprising type of financial product surpasses all other assets…(Hint: it's NOT bitcoin.)
(source: Visual Capitalist)
Lesson 2: Businesses Build Billionaires
Perhaps it’s obvious already that owning a business is a very valuable asset, but looking at this bar chart shows just how valuable. It’s the biggest differentiator between the assets of the mass affluent and the assets of billionaires, who have over half of their wealth in non-liquid business interests. The chart also shows what a big difference there is between the net worth brackets in general.
(source: Visual Capitalist)
Lesson 3: The Importance of Diversification
We saved the most important lesson for last, with two infographics showing different sides of the same idea.
As times change, so do the top players in the markets. Before the advent of digital cameras (and now smartphones), who could have imagined that Kodak would fall from a market cap of $177 BILLION to a mere $248 million today?
The same is true for broad investment categories. The long term trends are predictable, with stocks providing stronger returns over the long term than bonds. But the short term is always surprising. You can see the variety in this crazy quilt illustrating the winners and losers from year to year. This is why we favor an index-based approach! A broad, diversified approach allows us to benefit from these movements without guessing at what tomorrow will bring.
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Halpern Financial, Inc.), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Halpern Financial, Inc.. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Halpern Financial, Inc. is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Halpern Financial, Inc.’s current written disclosure statement discussing our advisory services and fees is available for review upon request.Please Note: Halpern Financial, Inc.does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Halpern Financial, Inc.’sweb site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.