Thumbs Down Information Overload

Physician's Money Digest, June15 2004, Volume 11, Issue 11


If you're a financial news junkie, youmay be harming your investmenthealth, according to the results of adecade-long Harvard University study.The study split investors into twogroups—one got boatloads of newsabout the stocks they owned whilethe others got only a daily pricequote. By the end of the study, theportfolios of those who received minimalinformation had done as muchas 50% better than the stocks of thenewshound investors. Apparently, investorswho obtain a great deal ofinformation are more likely to act on itthan those who have little, whichmeans more trading, higher commissioncosts, and lower returns. Turn off the news glut and be less willingto act on what news you do get.