Do Not Let Too Many Investing Choices Overwhelm You

by Hank Coleman

Do Not Let Too Many Choices for Investments Overwhelm YouDid you know that there are thousands actively traded mutual funds in existence? Investment companies are adding more every week too. Between stocks, bonds, actively traded mutual funds, index funds, ETFs, Roth IRA, and the like, investors have more choices than ever.

Have you ever become overwhelmed with too many choices? Has it made you hesitant to start investing? It shouldn’t hold you up investing.

Three Ways Not To Let Too Many Choices For Investing Overwhelm You

Mirror The Stock Market

Researchers have conducted several in-depth studies over the past few years that have shown that stock pickers cannot consistently, year in and year out beat the overall stock market rate of return.

So, if you can’t beat them, you might as well join them. Index funds offer investors an excellent opportunity to mirror the stock market as a whole. You can find index funds that match the performance of the Dow Jones Industrial Average, S&P 500 index, Wilshire 5000, and a host of others.

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Stop Watching The News

One of the biggest mistakes that many new and experienced investors alike make is watching the financial news networks. There are so many news programs and 24-hour programming that you can watch that it quickly becomes overwhelming.

Everyone has an opinion as to how you should be investing, which are the hottest stocks to buy or sell, and a multitude of other investing ideas. But, far too many of these ideas recommend that you jump in and out of stocks. Very few financial news programs are designed for buy and hold investors or long-term investors.

While buying and holding a stock or mutual fund is not a recipe to buy and forget, having a long-term outlook on stocks and mutual funds will help you ride out the market’s volatility. I have also found that not watching the news keeps me in a better mood as well. Far too much of the news is negative.

I have always found that watching or surrounding me with negativity naturally breeds it. I’ve become much happier by not watching the news at all in most cases.

Stop Talking About Investing To Coworkers

I have found that a lot of my coworkers have some crazy investing ideas, and far too many of them wind up telling me about them. They are talking about the next hot stock or sectors of the economy that are ready to take off. I’m not quite sure where they get their information.

I’m sure that most of them simply heard the tip at the office water cooler or even on a news program. Either way, it will greatly benefit you by not listening to them. Try not to find yourself in these situations like that.

Stay away from the water cooler or group hangout at work. Stay away from talking about investing with others who may wind up knowing even less than you do. You get what you pay for when you receive this type of free advice.

Steps You Can Take Right Now

Here are a few things that you can do right now to start investing. If you are looking for a few investments that are easy for beginners, you should look at maximizing your annual Roth IRA contributions.

You should also consider adding to your emergency fund if you do not have three to six months of living expenses saved up for a rainy day. If your employer offers a 401k retirement plan and especially if there is a matching contribution, that should be one of your first stops when looking for a place to invest.

If you are looking for an outstanding index fund to invest in that mirrors the market and the overall economy, consider investing in the portfolio offered by Betterment. You can set your allocation between stock and bond funds that meet your goals.

One thing I like about Betterment is that they will help you determine a good asset allocation between stocks and bonds depending on which financial goals you have. Be sure to check out my complete review of Betterment.

Are you ever overwhelmed with the sheer number of choices that you have as options for investments? Do too many choices ever stop you from investing all together?

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About Hank Coleman

Hank Coleman is the founder of Money Q&A, an Iraq combat veteran, a Dr. Pepper addict, and a self-proclaimed investing junkie. He has written extensively for many nationally known financial websites and publications. Hank holds a Master’s Degree in Finance and a graduate certificate in personal financial planning. Email him directly at Hank[at]MoneyQandA.com.


Hank Coleman has written 593 articles on Money Q&A. Learn more about Money Q&A on Twitter @MoneyQandA and @HankColeman.


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{ 2 comments… read them below or add one }

Penny

That’s good advice!

Reply

PKamp3

“Stop Watching The News” – absolutely, haha. Most market days are, well, pretty normal. Watching the news tends to whip you up into a frenzy with calls to action – sell? Buy?

It’s best to watch the fundamentals.

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