Portfolio Visualizer: Pros and Cons

Have you ever wondered what will happen to your investments when you retire? If you withdraw a certain amount each month to live on, will your money last as long as you need it to? Will you be able to pay for your kids’ college? What will happen to your portfolio if you start investing a little more (or a little less) each month?

These are important questions that involve making major decisions with your money. While no one can tell the future of the market, Portfolio Visualizer is an online software program that can help you make these decisions and visualize the potential future of your investments by using analytics.

How does it work?

Whether you’re a beginning investor or an old pro, this tool can help you see what could happen if you make certain investment choices. Portfolio Visualizer works by taking the data that you provide about your current portfolio, along with historical data, and running simulations. An enormous amount of data and variations are available to use. You can run simulations based on investing certain amounts, using specific stocks and ETFs, taking out a specific amount of money each month, and the choices go on and on.

It can show you what could happen if you rebalance your portfolio regularly (or don’t), and gives you the option to show what could happen if you take withdrawals or make extra contributions. 

Here’s what you need

Using the basic version of Portfolio Visualizer is free. To start, you can simply visit their website. You don’t even need to create a login to use their calculators, but to save your data you’ll need to create a profile and log in. 

You’ll need to know where your money is invested, and how much of it you have in each investment, to get the most out of this tool. If you have a variety of investments, you can import your portfolio using a CSV or Excel file. 

You should also have some idea of what you’d like to test. You can play around with the calculators and simulations, but it’s always helpful to have goals and an idea of what you’d like to do with your money. This will give you a starting point to work from. It can be overwhelming to look at all the choices and options available, but having the endpoint in mind can make it a little easier to get started.

Pros of using Portfolio Visualizer

Portfolio Visualizer can estimate how much your investment return will be at a certain rate over a certain number of years.

While there are many calculators out there that can help you estimate how much your investment return will be at a certain rate over a certain number of years, we all know that investments don’t move in a straight line. Historical ups and down are taken into consideration with this tool.

There is also an incredible amount of customization available with this tool. You can even model advisor fees and set goals to see how your portfolio will be affected.

Rather than just giving a simplistic, “if/then” answer, simulations provide five scenarios and the likelihood of each scenario. The charts created are easy to understand and follow.

Cons of using Portfolio Visualizer

One of the best things about Portfolio Visualizer could also be considered one of the negatives of using it. There is so much information, and there are so many choices available, that it can be overwhelming for someone without a broad knowledge of investments and economics to start using this tool. 

Their website is also low on information. If you have questions about what certain investment terms mean, you’re mostly on your own to find the answer from other sources. 

How much does Portfolio Visualizer cost?

Getting started with Portfolio Visualizer is free. At any time you can visit their website and run a simulation. However, if you want to save all the work you’ve done, you need to create an account. Accounts are free for the first fourteen days, and then billed annually at the rate of $19/month for the basic personal use plan and $39/month for the commercial use plan. 

Each plan tier gives you a few more perks. If you plan to spend a lot of time running simulations on your investments, or changing them, it may be worth the extra cost to save your information. This will keep you from having to upload or enter your data each time you use Portfolio Visualizer.

A prediction is still a prediction, even if it’s based on historical data. No one can say for sure what will happen, so it’s important to be thoughtful about your financial decisions and speak with an advisor if you are unsure or have any questions about your investments.