“Decision makers often pursue noninstrumental information--information that appears relevant but, if simply available, would have no impact on choice. Once they pursue such information, people then use it to make their decision. Consequently, the pursuit of information that would have had no impact on choice leads people to make choices they would not otherwise have made.”
C. Bastardi A, and E Shafir, 1998, “On the Pursuit and Misuse of Useless Information,” Journal of Perspectives on Social Psychology 75, p. 19-32.
We are bombarded with information in the investment world all day long. Many follow the screens to watch new stories unfold or watch prices to glean more information. Is it worth it?
Research suggests that is not a good use of time. That is not the same as saying all information is useless. The good investors is able to separate the good from the bad new and information. Critics will say that what is important information will change over time, so you have to look at all. I don't think so. Important stories will arise, but it is likely that these stories will be infrequent and you may be too late to capitalize on it.
Simple rule, stick to the important information and try to block out the rest. What is important are the few risk factors that have shown through time to have a statistical impact. Being a systematic investors can beat information overload. Simple rules like trend-following will work.
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