How not to get overwhelmed by 'choice overload' when investing, according to an expert


If considering your investment options feels overwhelming, you might be falling into a common mental trap.

"One of the biggest challenges facing investors, now more than ever, is choice overload," says Jeff Kreisler, editor-in-chief of and coauthor of "Dollars and Sense: How We Misthink Money and How to Spend Smarter." This is an example of a cognitive bias, or something that causes us to unconsciously make poor decisions, he explains.

"When we have so many choices and so much information, it can just become overwhelming and almost crippling," Kreisler says. "No matter what we decide to do, we feel like we've made the wrong decision because we see so many other options. It can really be a detriment."

A classic study on choice overload analyzed supermarket shoppers trying to pick a jar of jam and noted that consumers were 10 times as likely to buy when offered a choice of six varieties as they were when offered a choice of 24.

It's often better to sort of curate your choices or have your choices curated for you and narrowed down to a few than try to think of all the possibilities out there, because that's when we get overwhelmed.
Jeff Kreisler
editor-in-chief of

Your choice of investment assets is much broader. On U.S. exchanges alone, investors can select from more than 4,000 publicly traded stocks, 2,000-plus exchange-traded funds (ETFs), and more than 9,000 mutual funds. In addition to the sheer number of options, there's also a lot of information about these investments from a variety of sources.

How to overcome choice overload

So how can you narrow the thousands of investment options when you're starting out? Setting a few parameters can eliminate a lot of options in one fell swoop—look for only low-fee investments, for example, or ones that track a particular index.

"It's often better to sort of curate your choices or have your choices curated for you and narrowed down to a few than try to think of all the possibilities out there, because that's when we get overwhelmed," Kreisler says.

With a more narrow set of options, you can use some other techniques to make a decision—like playing devil's advocate. "Think about what's the worst thing that could happen," and see if the answer to that provides new information to counteract what's preventing you from making a decision, Kreisler says.

How cognitive bias affects your investments

Video by Courtney Stith

Using a buddy system — explaining your decisions to a spouse, partner, or friend — can also help you to identify when you make decisions in an emotional state versus a rational one, he adds.

Kreisler recently sat down with Grow to explain some of the common cognitive biases affecting investors. Check out the video above for additional examples, as well as tips for how to counteract these biases.

Here are some other Grow resources that can help:

acorns+cnbcacorns cnbc

Join Acorns


About Us

Learn More

Follow Us

All investments involve risk, including loss of principal. The contents presented herein are provided for general investment education and informational purposes only and do not constitute an offer to sell or a solicitation to buy any specific securities or engage in any particular investment strategy. Acorns is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.

Any references to past performance, regarding financial markets or otherwise, do not indicate or guarantee future results. Forward-looking statements, including without limitations investment outcomes and projections, are hypothetical and educational in nature. The results of any hypothetical projections can and may differ from actual investment results had the strategies been deployed in actual securities accounts. It is not possible to invest directly in an index.

Advisory services offered by Acorns Advisers, LLC (“Acorns Advisers”), an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Brokerage and custody services are provided to clients of Acorns Advisers by Acorns Securities, LLC (“Acorns Securities”), a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Acorns Pay, LLC (“Acorns Pay”) manages Acorns’s demand deposit and other banking products in partnership with Lincoln Savings Bank, a bank chartered under the laws of Iowa and member FDIC. Acorns Advisers, Acorns Securities, and Acorns Pay are subsidiaries of Acorns Grow Incorporated (collectively “Acorns”). “Acorns,” the Acorns logo and “Invest the Change” are registered trademarks of Acorns Grow Incorporated. Copyright © 2021 Acorns and/or its affiliates.

NBCUniversal and Comcast Ventures are investors in Acorns Grow Incorporated.