"Overcoming Choice Overload: A Guide for Investors"
Having too many investment options can overwhelm and paralyze investors, leading to negative impacts such as inertia, naive diversification, and favoring attention-grabbing investments. Behavioral biases like choice overload can hinder decision-making, but simplifying the process by investing in well-diversified mutual funds or balanced portfolios can help overcome this challenge. Employers' automatic enrollment in target-date funds for retirement savers and the use of professional asset managers at large providers are also effective strategies to reduce choice friction and make investing more accessible.