Key Takeaways

Visualization tools provide an efficient way to understand your portfolio

Graphics and images of assets can improve the decision-making process in potentially reaching financial goals

Expect visualization tools on the market today to play an increasing role in wealth management

Visualization can play an important role in accomplishing goals. Many athletes swear by this motivational technique as they imagine themselves in action and winning games. For investors, visualization can also play an important part in pursuing financial goals.

You can imagine yourself in retirement, owning a large home, paying for your child’s college or taking a trip. It’s easy to visualize the end result of your goals. However, it can be more difficult to imagine a big picture view of how your investments can work to help fund those goals. For investors, being able to see both can be helpful for an investment strategy.

Increasingly, today’s technology-centered world offers an array of advanced visualization tools. They can help to translate a complex financial picture to a more understandable snapshot. By offering a comprehensive overview, visualization tools can help investors when making decisions about their investment holdings.

How Visualization Works

Visualization tools and techniques use images and diagrams to communicate a message you can receive with just a glance. Here, you don’t need to scan through words and data to understand the point—you simply look. Animations, graphs and pictures can help us visualize a concept.

Visualization techniques can be effective for several reasons. Images can communicate complex information in a way that makes it easier to understand. Visualization works because the human brain can interpret what it sees more easily than it can when it compiles data on its own.

Personalized Investment Solutions

Advice tailored to your financial goals

Today, technology has helped to advance visualization techniques to new frontiers with digital graphics and interactive multimedia. In the financial world, visualization tools have become a valuable tool for their ability to convey complex numbers. Now, financial portfolios can look like colorful pie charts or graphs instead of a series of black and white numbers.

How Investors Can Leverage Visualization Tools

For investors, understanding their portfolio and monitoring its movement can be challenging. You can regularly view percentage changes and total profits and losses, but comparing these metrics can be challenging. With visualization tools, investors can immediately see their portfolio’s status and view key performance statistics in real time on one dashboard.

Visualization tools can also offer starting points for conversations with your financial consultant, as you review how you’re progressing toward your goals. If the data you see as an image shows you are off track, your consultant can suggest what steps might help. If you see that your portfolio looks overweight in certain sectors or asset classes, maybe it’s time to consider rebalancing.  

Understanding your total portfolio is a key step in pursuing your financial goals. One visualization tool that can help you get a grasp on this information is TD Ameritrade’s Investment Analyzer (see figure 1), which is available via Personalized Portfolios from TD Ameritrade Investment Management, LLC.

The Investment Analyzer can sync all of your investments into a comprehensive picture in one spot. With this feature, information from several sources can flow through to provide a real-time snapshot of your investments, down to the individual holdings.

FIGURE 1: READY, SET, VISUALIZE. Visualization tools such as the Investment Analyzer can help investors get a broad overview of their investments, at the firm, account and holding levels. For illustrative purposes only.   

The Investment Analyzer’s image consists of three concentric circles:

Inner ring: firm level investments through brokers, banks, investment companies Middle ring: account level investments in individual, IRA, 401(k), managed portfolios accounts, checking, savings Outer ring: holding level investments like stocks, bonds, and funds within each account

The Bottom Line

Essentially, the Investment Analyzer helps Personalized Portfolios clients pursue their investment goals through wealth visualization. This technology allows investors to better understand their diversification overall so they can monitor their portfolios.

With time, it is likely that investment analyzers will continue to evolve enhanced features and functions that can help you gain more confidence in your financial planning process.