[비즈한국] Every morning as soon as we open our eyes and log onto social media, our feeds are filled with stylish items used by people living their 'best lives,' and when we open YouTube, we are flooded with sensational thumbnails from investment experts shouting, "If you don't buy this right now, you'll become a 'lightning pauper'." People don't even let go of their smartphones on crowded morning subway commutes. We are living in a time where we encounter more information than ever before. Yet, paradoxically, our bank accounts haven't grown proportionally.
For investors, information has always been considered a virtue. This is based on the belief that those who know more and move faster reap the profits. However, in today's investment environment, this formula no longer works. While accessibility to information has reached an all-time high, there are growing complaints that real-world returns have actually decreased. Why can't we become smart investors in an environment where dozens of pieces of investment information are poured out every day—from YouTube and social media to securities firm alerts?
The problem is not the amount of information, but the behavior that information creates. A significant portion of investment content focuses on stimulating action rather than analysis. Phrases like "If you don't buy now, it's too late," "This time is different," and "A big trend is coming" are not designed to inform, but to demand immediate decisions. Algorithms repeatedly expose us to these sensational messages, and investors are drawn into increasingly frequent trading. While the information may seem free on the surface, the actual cost is paid in the form of 'trading.' Ultimately, the success or failure of personal finance depends not on how much you know, but on how cleverly you filter it out.
One of the keywords that has recently permeated consumption trends is 'Ditto consumption.' It refers to the behavior of uncritically following the tastes of a specific person or content creator. People open their wallets without hesitation simply because "that person bought it" or "a famous YouTuber recommended it."
However, as time passes, many end up regretting it, realizing, "This isn't my taste." Algorithms analyze my search history and dwell time to constantly suggest images that I am most likely to consume without resistance. While Ditto consumption may seem convenient, it is the most powerful obstacle to asset formation.
If you repeat consumption spoon-fed by algorithms without your own criteria, someone else's profits will grow faster than your own assets. The first step to becoming wealthy is to break free from the 'fake tastes' created by algorithms and regain control of your consumption.
The same goes for investing. YouTube is overflowing with videos analyzing stocks and virtual assets all day long. They explain charts and macroeconomics to predict tomorrow's stock prices. The more investors watch such content, the easier it is to fall under the illusion that they are 'studying.'
However, the amount of information is not proportional to returns. In fact, excessive information clouds judgment. One expert might say, "Semiconductors are the way to go," while another warns, "A recession is coming." Ultimately, instead of gaining conviction, investors become anxious and end up repeating buying and selling.
World-renowned investor Warren Buffett once said, "Successful investing has nothing to do with IQ; it depends on the temperament to control impulsive investing." What determines investment performance is not the amount of information, but the ability to filter out the noise. In fact, there is an anecdote that when a U.S. brokerage firm analyzed client returns, the group with the highest performance was the one that consisted of 'clients who forgot their account passwords' or 'deceased clients.' Doing nothing resulted in better outcomes than being overly diligent in trading.
So, what is the solution? First, start an 'Algorithm Diet.' Instead of trying to get more information, build a firewall so that low-quality information cannot invade your judgment. For example, set rules such as, "Check the stock account only once a month," "Only buy a product seen in a social media ad if I still want it after 72 hours," or "Look at corporate filings directly rather than watching YouTube recommendation videos."
Also, boldly unsubscribe from channels that incite fear and greed with sensational titles. It is better to choose one reliable, serious news outlet or one in-depth book instead. What is important in investing is not quick reactions, but the power of time.
Bae Jae-kyu, CEO of Korea Investment Management and known as the 'father of ETFs,' says, "It becomes much more comfortable when you look at where the world we live in is heading rather than looking at 'now,'" adding, "Remember that successful investing is about direction and time."
The market is always accompanied by noise. Let's invest the time and energy secured by watching less information into our main jobs or genuine rest. Increasing your own value to grow your seed money can be a much more realistic financial strategy than repeating short-term trades based on shoddy information. The winner in the age of algorithms is not the one who reacts the fastest, but the one who reacts the least.