Analysis Paralysis – Investing in Equities!
History is evidence to the fact that people have an anchoring bias to what they have seen their
parents doing. “Rich Dad Poor Dad” by Robert Kiyosaki is a classic example of how the thought
process of one’s parents can change the fortune of an individual.
Statistics shows that more than half of India’s wealth is concentrated in real estate. This is what
our parents have invested in. We as the youth of the nation haven’t started investing and as
soon as we decide to start, first thought that still comes to our mind is buying a real estate.
Times are changing and given the developments happening in India, it’s time to move towards
creating financial assets more than physical assets (gold & real estate!) but we don’t know how.
Peter Lynch has said “Schools have forgotten to teach the most important subject of all –
Investing.” However, a bigger problem which exists before us is “The problem of Plenty”, even if we decide to start investing in equities, there are more than 6000 stocks and 2000 mutual funds to select from.
This is a sign of progress – having more choices is empowering. But having to choose from those
many options without proper guidance can lead to analysis paralysis – If you have spent 30
minutes in a mobile store trying to figure out which phone should you buy and coming out of
the store empty handed because you didn’t want to spend a bomb on an iPhone – you would
understand what I’m trying to say. Too many options would also mean that we end up less
satisfied, because even after we’ve made our choice, we might feel uneasy over whether really,
we should have bought an iPhone!
We don’t know where to start and our parents have mostly seen everyone around burning their
hands in equities and so we too are having a fear of investing. Three main reasons why we feel
the same analysis paralysis when it comes to investing are firstly, there isn’t any formal
investing education in schools. Secondly, we don’t want to spend on a course to learn investing
and lastly, we lost money by investing on tips from friends/ uncles and news channels.
We at Catalyst Finvest have developed a lot of useful content which are fact based and to not
let people fall in the trap of analysis paralysis, our aim is to enable every person to easily navigate through the difficult terrain of financial planning and making investment decisions to
achieve Financial Freedom.
At a certain point in time, it’s important to just take a decision and do something and the time