New apps buck the trend of increasing speeds and greater investing access in order to improve behavior
Trading and investing technology has traditionally focused on increasing speed and providing greater access to trading platforms. Faster connections, real-time data feeds, user-friendly apps, even online forums, have made it easy – and fun – to trade stocks and other financial securities.
This Wall Street Journal article talks about a couple new apps that do the opposite. These apps slow down access to a trading and/or social media app. They are more likely to make a positive impact on your investing behavior than anything that tries to increase speed and decision-making.
one sec, an app highlighted in the article, was designed to reduce impulsive social media usage. Now it is being used to mitigate impulsive trading activity. A subject of the article states:
I have to consciously make an effort to go look at stuff that I actually want to know instead of scrolling through feeds and endless conversations about stuff that is actually not very useful.
Two things come to mind from this.
All the efforts to increase speed and access to information does nothing for your ability to process the correct information. Separating real signals from the “noise” becomes increasingly difficult with more noise. Ubiquitous access to information makes you think you are better informed. All it does is arm you with more noise that may have little value in your quest to make an optimal decision (assuming that is what you want to do). Acting on investment forums and social media videos is a FOMO strategy that is not based on your best interest. It may not even be in the poster’s best interest.
This is also reminiscent of Daniel Kahneman’s “System 1” and “System 2” thinking. In his book, Thinking Fast and Slow, he says “System 1 operates automatically and quickly, with little or no effort and no sense of voluntary control. System 2 allocates attention to the effortful mental activities that demand it… The operations of System 2 are often associated with subjective experience of agency, choice, and concentration”. Those are very beneficial mental modes to tap into before hitting the “Buy” button on an app whose goal is to keep you hooked, not look out for your best interests. Even a short delay in accessing a trading app, or social media site, will force you to rethink your motives of wanting to do that activity.
After reading the article I installed the one sec app to test it out. I do not use trading apps so I used Twitter, which is my social media vice.
This prompt appeared after about 10 seconds of a blank screen
Source: my phone, one sec app
The free version allows it to delay only one app, but the paid version is inexpensive, especially compared to the money and time saved by not succumbing to impulsive trading and social media behavior.
(I do not have any affiliation with the one sec app.)
The opening screen on the app said, “Gain back control over your smartphone usage. one sec empowers you to spend more time in the real world by decoupling your brain for the perfidious psychologic traps social media companies add to their apps to make you addicted.”
Remember that next time you just have to buy that stock someone was touting online.