The Paralysis of Too Much Information in Investing

August 14, 2023

One benefit of living in a free country with Internet access is the wealth of information at our fingertips. We can easily research almost any topic online and find a range of perspectives: the good, bad, and ugly. However, more information does not necessarily lead to better decisions.

The sheer abundance of options can be paralyzing, as psychologist Barry Schwartz explains:

…it produces paralysis rather than liberation. With so many options to choose from, people find it very difficult to choose at all. I'll give you one very dramatic example of this, a study that was done of investments in voluntary retirement plans. A colleague of mine got access to investment records from Vanguard, the gigantic mutual fund company, of about a million employees and about 2,000 different workplaces. What she found is that for every 10 mutual funds the employer offered, rate of participation went down two percent. You offer 50 funds -- 10 percent fewer employees participate than if you only offer five. Why? Because with 50 funds to choose from, it's so damn hard to decide which fund to choose, that you'll just put it off till tomorrow, and then tomorrow and then tomorrow and tomorrow, and, of course, tomorrow never comes….1

Essentially, the perfect can be the enemy of the good.

With endless opinions on which investments to buy or sell, it's easy to become overwhelmed and inactive. Sometimes it's better to just start investing rather than endlessly searching for the one right option.

And there are SO many opinions there: buy this now, sell this now, buy this product, sell this product, get ready for doom, get ready for dancing, get out of the market, stay in the market…

And two classics:

“This time it’s different.”

“I’ll just wait for my guy/gal to get in office.”

The takeaway — too much information can be the anesthetization of action.

Of course, due diligence is required when making any investment decision. But being perpetually stuck means time keeps passing you by. Often, time itself is key to investment growth.

Don't remain ignorant but beware analysis paralysis from information overload.



  1. “The Paradox of Choice” (July 2005), Accessed online: