Information Overload

Have you noticed the glut of investment information out there? Too much information about investments and strategies can confuse and paralyze you. Some investors find it hard to pursue a long-term investment strategy in this environment. This means it’s more important than ever to have a trusted advisor to help you filter the many conflicting opinions spread by the media.

It wasn’t always this way. When I started in the investment business in 1984, we had only three major sources of investment information: The Wall Street Journal, occasional news segments dealing with business, and a Friday-night TV program called Wall Street Week.  Even brokers had very limited sources of information and opinions. Back then, it was relatively easy to maintain your focus on the long-term.

Today we face a different reality. For starters, there are two major television networks dedicated to full-time business news. Next, there’s a multitude of periodicals discussing investment issues. And, then there’s the Internet, which people understandably turn to for information.

The Internet, however, has given the term “information overload” new meaning. For example, my recent Google search yielded these startling numbers of search results:

  • Stock market forecast: 33.9 million results
  • Investment blog: 133 million results
  • How should I invest in 2013? 1.1 billion results—Yes, that’s billion.

No wonder people feel overwhelmed. There’s another problem, too. It’s often hard to differentiate good advice from poor advice. This makes it difficult to manage investments using information from the Internet.

In addition, the talking head on CNBC  has no information on the circumstances faced by each individual in the audience. As a result, he or she can’t possibly know whether the investment opportunity they are discussing is appropriate for the listener. As a result, those who get their investment ideas from the TV or internet are much more likely to develop a portfolio of uncoordinated investments which could seriously erode their ability to achieve their goals.

Ironically, in this age of almost unlimited investment opinions, it is more important than ever for investors to filter information to find what is relevant to their individual needs and circumstances. A good advisor is that filter.

 

About Chas Boinske

Charles P. Boinske, CFA, is a 30 year investment management veteran overseeing the strategic direction and portfolio management process for Independence Advisors, LLC. Have a question for Charles? CLICK HERE TO ASK CHARLES

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