Option Overload

A little bit Investing, A little bit personal

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Option Overload

I tried to buy a jacket on Asos yesterday.

3,208 options…. 

Why? Nobody wants this.

As someone who needs to see every possible option before making a decision this was a devastating turn of events for me.

I instantly just gave up and now I am left jacketless. 

This choice overload can catch us in so many parts of life.

Where to live? Where to work? Who to date? What to wear?

We have so many options at our fingertips, but more is not always better.

We love to put optionality on a pedestal, but sooner or later, it starts working against us.

At a certain point, more options just become counterproductive. People busy themselves with the decision-making process. We feign productivity to the point where everything is moving, but nothing is being done.

We let options become a distraction.

How to Override It

When I started investing, I had to override my natural tendency to over-analyze.

With endless options and unlimited information, analysis paralysis would take hold, and I would end up making no decision at all. Time and time again, I would miss trades I knew were high probability winners because I was trying to dot every ‘i’ and cross every ‘t’.

My solution?

Choose the option that is ‘good enough’.

It sounds basic but bear with me.

This doesn’t mean just ‘finger in the air’ your investment portfolio. The process goes something like this.

• Set the parameters of the decisions you are trying to make

• Allot a justifiable amount of time to do the research

• Once the time is up, conclude your research and make a decision

• The end

This process can apply to any aspect of life.

You can spend all day making these decisions, but after a certain point, it is just diminishing rates of return.

Time is not an unlimited resource.

The successful outcome of a decision is not directly proportional to the amount of information used in the decision-making process or the amount of time it takes to make it. There comes a time of critical mass. 

Perhaps this isn’t the precise answer and guidance that people crave, but most people don’t need precision; they need to take action.

This will help.

‘Good Enough’ Solutions

I get questions all the time from people who are looking to start investing. Three of the most common reasons they haven’t started yet is

• They don’t know which financial broker to use.

• They don’t know what to invest in.

• They don’t know how much to invest.

  Here are my answers

   

• Interactive Brokers or Degiro will work well for those in Ireland. Both are low-cost and highly liquid. The differences are negligible over the long run.

• Some combination of stock and bond will do the trick for most when getting started. Low-cost ETF’s such VUAA, VWCE, VFEA, VHVE, V80A and IBTS will give you the exposure you need for a hilariously low price.

• Start small. No need to jump in all at once. Find the easiest first step and take it.

To some this may seem too vague, too general, too easy. But as someone who watches markets all day, I promise you it's not.

When you are starting out, there are so many options. It's debilitating. You can spend all your time in the weeds, blinded by the minutia, but so many of the options are just different ways to do the same thing.

Whether you decide to go with Degiro or IB really isn't all that important. Whether you choose Vanguard ETF's or MCSI ETF's isn't going to move the needle.

Not investing because you couldn't move past the decision-making process……well….. That makes all the difference.

Don't let the decision-making process become an excuse for doing nothing at all.

As always, strive for progress, not perfection.

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1 Life Update

Move to Spain last week. Marbella will be home for the next 4 months

First impressions 

• Driving on the opposite side of the road is the physical manifestation of dyslexia.

• This place is about 100 times bigger than I was expecting. I thought you’d just be able to walk everywhere…. YOU CAN NOT.

• Getting a bike is also out of the question. Unless you’re on EPO you’re not getting up the hills here. No way are my dodgy knees up to it.

• Only packing shorts and t-shirts was an amateur mistake. Mornings are CHILLY (hence my jacket search debacle)

• My budget-chic attire just ain’t gonna cut it here. I'm pretty sure the entire population of Puerta Banus were disgusted by my presence.

• This place has to hold the record for the largest population of tiny dogs per capita

• Puerta Banus….Not for me

• Marbella old town… Awesome

Any recommendations, send them my way?

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