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Individual Stocks

Individual Stocks: The Basics

Why is information overload a huge risk factor when I invest in individual stocks?

In hopes of generating more viewers and readers, media companies must create stories to keep their consumers interested. With the proliferation of Internet usage by the individual investor, the once secretive investment community may in fact use and have access to much of the same information that individuals use. Financial stories abound in today’s world, and the less-than-savvy investor may become overwhelmed or panic upon the release of any news story. Many people in the investment community believe the global financial news has a degree of homogeneity, in which all media sources report on approximately the same stories, making individual investors who follow such news outlets and networks unnecessarily anxious, even when the story may have little impact on the stock’s long-term price. The unprofessional investor may be unable to distinguish the difference between a meaningless piece of information and one that may affect a stock’s price.



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