Method experience-based fact box with a goal
Chances of financial investements – Which forms of investment do you mix to reach your investment goal?
Why is it relevant to communicate uncertain events to consumers?
Why is it problematic to communicate uncertain events to consumers?
Proof of effectiveness
- Bradbury, M. A., Hens, T., & Zeisberger, S. (2014). Improving investment decisions with simulated experience. Review of Finance, 19(3), 1019–1052.
- Garcia-Retamero, R., & Galesic, M. (2010). Who proficts from visual aids: Overcoming challenges in people’s understanding of risks. Social Science & Medicine, 70(7), 1019–1025.
- Hasher, L., & Zacks, R. T. (1979). Automatic and effortful processes in memory. Journal of Experimental Psychology: General, 108(3), 356–388.
- Hau, R., Pleskac, T. J., Kiefer, J., & Hertwig, R. (2008). The description–experience gap in risky choice: The role of sample size and experienced probabilities. Journal of Behavioral Decision Making, 21(5), 493–518.
- Hertwig, R., & Erev, I. (2009). The description–experience gap in risky choice. Trends in Cognitive Sciences, 13(12), 517–523.
- Kaufmann, C., Weber, M., & Haisley, E. (2013). The role of experience sampling and graphical displays on one’s investment risk appetite. Management science, 59(2), 323–340.
- McDowell, M., Gigerenzer, G., Wegwarth, O., & Rebitschek, F. G. (2019). Effect of tabular and icon fact box formats on comprehension of benefits and harms of prostate cancer screening: A randomized trial. Medical Decision Making, 39(1), 41–56.
- McDowell, M., Rebitschek, F. G., Gigerenzer, G., & Wegwarth, O. (2016). A simple tool for communicating the benefits and harms of health interventions: A guide for creating a fact box. MDM Policy & Practice, 1(1), 2381468316665365.
- Schwartz, L. M., Woloshin, S., & Welch, H. G. (2009). Using a drug facts box to communicate drug benefits and harms: Two randomized trials. Annals of Internal Medicine, 150(8), 516–527.
- Ungemach, C., Chater, N., & Stewart, N. (2009). Are probabilities overweighted or underweighted when rare outcomes are experienced (rarely)? Psychological Science, 20(4), 473–479.
- Wulff, D. U., Mergenthaler-Canseco, M., & Hertwig, R. (2018). A meta-analytic review of two modes of learning and the description–experience gap. Psychological Bulletin, 144(2), 140–176.
Option 1: You can embed the given visualisation
It is possible to embed the visualisation from our website including the frame text via iframe. To do this, use the following html-code for your website: <iframe frameborder="0" height="650px" src="https://static.risikoatlas.de/visualisations/experience-based-fact-box/index.html" width="1024px"></iframe>
Chances of financial investments – Which forms of investment do you mix for your returns goal?
What does the chart show?
The fact box shows you how returns have developed over fixed periods of time in the past. It allows you to get an idea of return payments of individual investment forms when investing a certain amount of money over a fixed term. You can define an investment target (e.g. 2000 euros) which you would like to achieve with a one-off investment (e.g. 1000 euros) over a fixed term (e.g. 10 years). For example, you can "invest" 100% of your investment amount in the German DAX in the left box. In the right box you could also fictitiously invest the investment amount in gold and compare with which investment form you are more likely to achieve your investment goal set at the beginning.
You can always draw a comparison between two of the six investment forms offered (DE Dax shares, DE general shares, gold UK, time deposits, federal bonds and USA S&P shares). Mixed investments are also possible, e.g. if you do not want to "invest" 100% of your money in the Dax, but only 50% of your sum and the other half, for example, in fixed-term deposits.
The goal amounts achieved have already been adjusted for inflation, but taxes have not yet been taken into account. With every click on the bar "How many reach the goal?" the profit or loss of another investor is added. You could add further fictional investors individually (click on "individual") or in groups of 10 investors (click on "in groups of 10").
The fact box should give you an impression of the relationship between risk and return, and which investment forms are riskier than others. Please note that developments in the past, especially in the financial sector, are no predictor for future developments.
Where are the numbers coming from?
The data were obtained from the following sources: Allfinancialmatters.com, Deutsches Aktieninstitut e.V., Deutsche Bundesbank, Measuringworth.com, Prof. Richard Stehle (Humboldt-Universität zu Berlin).
What is the quality of the data?
The fact box "Comparing investment forms" shows returns from the past.
The calculation is based on the monthly closing rates of the respective years. In relation to the past, the quality of the data on actual trends is high. However, developments from the past are never a predictor for the future. For more information on the methodology, please refer to the information symbol in the top right-hand corner.
The RisikoAtlas project, the Harding Center for Risk Literacy, the Max Planck Institute for Human Development and the sponsors of the research project do not make any direct or indirect recommendations for certain forms of investment. The RisikoAtlas project, the Harding Center for Risk Literacy, the Max Planck Institute for Human Development and the sponsors of the research project are not liable for any damages resulting from the purchase or sale of investment products based on this document. If an organisation uses the fact box "Comparing investment forms" for its purposes or makes it available to consumers, it is fully responsible for compliance with the applicable regulations.