From CNBC:

– Having too many investment choices can overwhelm and harm rather than help, according to financial experts. Choice overload can lead to bad decisions or inaction. Simplifying the investment process is recommended, such as starting with well-diversified mutual funds or balanced funds with lower costs.

– The paradox of choice extends beyond investing to everyday decisions like shopping for groceries. A preliminary study showed that when shoppers were offered a greater variety of jam flavors, they showed less likelihood of making a purchase than those with fewer options. Retailers have adapted to avoid choice overload, but the investment world still has too many available choices that can be overwhelming.

– When it comes to choosing investments in a taxable brokerage account or individual retirement account, there are often hundreds, if not thousands, of options to consider. However, experts advise simplifying the process by investing in well-diversified mutual funds or balanced funds starting out to avoid being overwhelmed by too many choices. This approach places a majority of the investment decision-making in professional asset managers’ hands and keeps costs low.



Read more: What choice overload is, and why it can paralyze investors