Knowledge is power, but is there such as thing as too much information?
In this day and age of technology, it’s so easy to get information. Want to know how to replace a laptop screen? Watch a YouTube video. Should you refinance your mortgage? Check out bankrate.com for current rates. Should you invest in a mutual fund or buy a company’s stock? Google and you might get 10,000 hits. Everyone has an opinion these days and they aren’t afraid to share it.
The flow of information can be useful to investors, but you have to be able to decipher it and use it correctly. First, you need to know which “expert” is giving their opinion and which is giving accurate technical data. You need to find valid sources of research that can separate fact from fiction. Second, you have to be able to organize, interpret and analyze the information so you can make informed investment decisions. This is a learned skill that requires education and practice, even for the experts.
Doing your own due diligence should never be replaced by the high profile or charm of any one source of information. According to Chris Mier, chief municipal analyst at Loop Capital Markets in Chicago, “The retail investor should be provided as much information as they want and should not be shielded from information,” but they also shouldn’t be offered “crystal ball” forecasts. It’s important to remember that ultimately, investing is about make decisions regarding an unknown future, no matter how much historical data we look at.