Of course, we now know that more choice isn’t a universal good. Because the brain is a bounded machine - it can only process so much information at any given moment - people actually find excessive choice repellent. When we’re given too many options and no way of distinguishing between them - the different varieties of floss all seem equivalent - we experience a tremor of anxiety, the mild panic of supermarket uncertainty.
Jonah Lehrer comments on a recent study done at Columbia University on how people react when given more investment choices for their retirement programs.
Bottom line, too much choice tends to make investors “freeze up” rather than enhance their investment experience and investment returns.
I would take that one step further and suggest the major problem investors face today is ” too much information” when it comes to making investment decisions. The Internet along with aggressive marketing programs by investment service providers lead to more confusion and subsequently “more stress” for investors.
You must be logged in to post a comment.