Is it easier to make a decision when you have three options or ten options? Whether it’s a restaurant menu, song list, or a full wardrobe, the luxury of wider varieties can often lead to Choice Paralysis. While choosing from more options can often lead to making better decisions, it can also throw our investing momentum into neutral.
Choice Paralysis occur when investors experience information overload. “How do I know which investment option is the right one?” And so, Choice Paralysis locks the investor into inaction and delays any potential value growth. Basic studies show that the probability of 401(k) participation actually decreases in direct correlation to the number of investable funds available. (Mitchell & Utkus)
Avoiding Choice Paralysis begins with a trusted financial advisor who can present you with a curated list of the best available options. Their industry and market experience equips them with unique insight to discount bad or even good, but not great, investment options. The end result is a shortened list of exceptional investment opportunities without the exhaustion of information overload. The easiest choice to make is trusting your financial advisor to provide you the best choices available to start building wealth today instead of wondering tomorrow if you made the right choice.