I'm a sucker for charts and graphs. I once attended an Edward Tufte course just for kicks. Though I don't do much with charts and graphs around GRS, I always admire the work of others.
For example, last year when I shared my guide to understanding the federal budget (and the follow up on the truth about taxes), I pointed to Jess Bachman's annual Death and Taxes poster, which attempts to visualize the entire U.S. federal budget in just six square feet. Bachman's poster contains over 500 programs and departments, with the size of each item on the poster proportional to its budget amount.
Another company called History Shots creates (and reprints) great charts and graphs on a variety of subjects. I own their Race to the Moon map and their History of the Political Parties timeline. I want their History of the Dow Jones Industrial Average poster.
And the reason I'm mentioning all of this? A company called Investments Illustrated sent e-mail the other day to tell me about their Big Picture chart, which illustrates the returns of major asset classes (such as stocks and bonds) since 1926. Though they intend this for financial advisers to display in their offices, I covet one myself.
You don't have to buy these charts to enjoy them. All three of these companies allow users to view their posters via web browser, which allows you to zoom in and out, or to scroll around the page.
Not everyone is a financial geek, I know. But if you're interested in money and you're interested in charts and graphs, you may want to check these out. (And if you know of other posters like these, please tell me!)
Author: J.D. Roth
In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.
I’m not a fan of charts and graphs myself (might have something to do with the financial geek stuff?), but this is really great and there’s some covetousness going on here too.
I hear ya J.D. I’m a sucker for charts and graphs too. That’s probably why I’m an analyst by day!
I love my Death and Taxes poster from last year. I point to it occasionally during office hours. :)
That investments illustrated chart looks INCREDIBLE. As an MBA prof and pf blogger & author I am always referencing historical asset class returns. The chart would keep the info handy. I’m going to the link now.
I’ve never liked that “mountain chart” of investment returns. I think it’s rather misleading.
Since it uses a logarithmic scale, it makes market drops look like nothing.
For example, 2008 or 2000-2002 each look like a little tiny dip in the stock market, when in reality they were declines of more than a third in the market’s value. For many investors, those periods were terrifying.
I think charts like that, which give an overly-smooth appearance of market returns, trick investors into thinking that market volatility is no big deal. Then they end up with a portfolio with far more risk/volatility than they’re truly comfortable with — often resulting in big mistakes when the market experiences its next decline.
As a researcher I adore charts and graphs. But I’m also very critical: many, many of the visuals that I see around are either inaccurate (at best) or incredibly misleading (at worst). So when they’re good they’re wonderful–but you have to be sharp.
I really like the Death & Taxes poster. It is so much easier to see the big picture. Defense take up so much of our budget, that’s where we need to cut.
I made a money flowchart that shows how we spend and save. It’s more of a high level road map and not really detail budget plan, but it works for us.
Take a look and let me know what you think.
http://retireby40.org/2010/11/retirebyfortys-money-flowchart/
They have lots of cool infographics at visual economics, for example, http://www.visualeconomics.com/food-consumption-in-america_2010-07-12/
Another great data visualization is Hans Roslings “200 countries, 200 years, 4 minutes”…its on the BBC youtube channel.
THese are so freaking cool. Wish I could find these huge and put them up on my wall!
As they say, “A picture is worth a 1000 words.” These visual charts have the power to quickly convey a vast amount of info and help us see the big picture.
Now, how can we visually show people the power of compounding in a visual way?
My daughter ordered the Death and Taxes poster last year, and gave it to her Government teacher at school. Got her extra credit!
I just finished reading “Investing for Dummies” by Eric Tyson and “The Big Picture Chart” falls perfectly in line with his teachings.
Pretty much, you can expect approximately a 10% return in the stock market if you adhere to investing for the long term and diversifying your portfolio.
@The silver purse:
like this?
http://www.wolframalpha.com/input/?i=y+%3D+1.08%5Ex+from+0+to+50
JD,
This charts are pretty awesome. Barry over at The Big Picture (blog) posts up charts like these every week, and they’re some of my favorites to check out!
@JamesFowlkes: Thank you for your kind words. The Big Picture chart is available in poster format, and can be ordered through our website: http://www.investmentsillustrated.com