Do you ever wonder if your asset allocation is ideal? I do. With a number of different types of investment products and asset classes, you could come up with countless combinations.
Throw in weighting and/or proportions (i.e., how much to allocate toward a particular asset class and/or specific security within an asset class), and your head might be spinning.
Background
We’ve explored various components of the Balanced Dividends passive income engine, but we’ve only scratched the surface of the various building blocks available.
For a visual of what might be possible, I went to one of my usual starting places: Google. Yes, I plugged in a search for “asset allocation.” Only 85,700,000 results later, I’m still overwhelmed.
Alas, I recognized I’m a visual learner. Instead of scrolling aimlessly through results and images, I went to one of my favorite sites for visuals.
Visual Capitalist & Investing Science!
I’ve found some great content at the Visual Capitalist. We’ve referenced and featured some graphics and visuals in certain parts of past posts.
However, I’ve yet to utilize a particular visual for the primary theme of a topic. Until today!
I recently came across the Periodic Table of Investments. Phil Huber created the original on his blog, BPS & Pieces. Be sure to check out his site and the Visual Capitalist.
With that background, let’s check out this great visual.
Overview
While the Period Table of Investments can appear overwhelming on its own, you need to understand how to decipher the symbols and colors. There are three primary components:
1) Investment Objectives
The seven investment objectives are represented by letters at the top of each box:
I tried coming with up an acronym for YPIGDLT, but I couldn’t think of one.
2) Element or Security Categories
Somewhat similar to conditional formatting in Excel, I really liked the use of colors to group similar investments together.
The only key difference here vs. conditional formatting: the colors just group the similar investments together – not a scale or variance.
3) A Key or Legend
What would a periodic table of anything be without a key or mechanism to translate the symbols? For me, a frustrated and illiterate science student.
To help readers, Phil created the following helpful translation:
Putting It All Together
Here is the full table available via both Phil’s site and Visual Capitalist as referenced above.
Overall, I thought the table does an excellent job of capturing the various asset classes.
Quick Thoughts and Considerations
I first spent about 20 minutes staring at the overall table. After logging into Personal Capital to see my own current holdings compared, I realized the investing universe is so vast.
From the mentioned asset classes (equities, fixed income, etc.) to variances within each asset class (single securities, index funds, ETFs, private vs. public, etc.), we have a lot of choices.
Simple is usually better. However, I do like considering products or strategies that might give my portfolio a little extra income boost. Or perhaps I want to add a little growth opportunity.
This excellent visual reminded me I’ve only scratched the surface of certain product types. And you know what? That’s okay for me – at least right now.
Readers, what do you think of these visuals? Do you find any lessons learned or considerations when reviewing them? What are your thoughts?
Related:
Fundrise Passive Income Review: 18-Month Update
What Is This Crap? Clean Up Your Stock Watchlist
Less is More: Updated Balanced Dividends Ecosystem
Our favorite free financial tool is Personal Capital. We use it to track our net worth, manage our spending & savings, and to monitor our investments. It’s simple and free to use.
This is the first post at BD that had my head spinning. Required a second read but finally I get it. One has to ask if too many paths to diversification can lead one away from their ultimate investment goals. I see the benefit of such an analysis, but way to complicated for me.
A good point re: a simple path. If you see my quick thoughts near the end, you’ll see also stated simple is usually better. – Mike