Investors Tend To Be Impulse Buyers—But How Much Time Should You Really Spend Researching Stocks?

The median investor spends just six minutes researching a stock before buying it, according to 2025 research from New York University’s (NYU) Stern School of Business and the National Bureau of Economic Research. That’s barely enough time to read a few headlines, yet it’s how many people make decisions that could impact their finances for many years to come.

“Just because you like the stock doesn’t mean it’s a great buy at a particular moment,” Stoy Hall, chief executive officer and founder of Black Mammoth, told Investopedia.

This impulse-driven approach helps explain why the average individual investor earned 16.5% in 2024 while the S&P 500 returned about 25%, according to DALBAR’s annual Quantitative Analysis of Investor Behavior Study.

The Problem: Six-Minute Stock Picks

The NYU researchers analyzed the complete browser histories of 484 individual investors over four months in 2007, tracking more than 8 million clicks and 60,000 hours of internet use. The median investor spent only six minutes researching a stock before trading it, most of that time in a burst immediately before placing the order.

Even more telling, 73% of the time was spent looking at price charts focused on just one day or less of trading history, 14% was devoted to analyzing the company’s fundamentals (earnings, dividends, and the like), and less than 1% was spent considering metrics related to risk.

While the study drew from 2007 data—nearly two decades ago, it’s still valuable because researchers rarely get such a fine-grained look at online investing practices—more recent evidence suggests retail investor behavior has only become more impulsive in the time since. A mountain of research has found that individual investors trade far too frequently, don’t diversify enough, and follow the crowd. When they do pick winners, they sell too early to lock in small gains, but when investments lose money, they hold on hoping to break even—the exact opposite of what successful investing requires. These problems are exacerbated by the reality that most people lack the time or mental bandwidth to research all their investment options. Instead, they gravitate toward whatever stocks are making headlines or trending on social media, even though chasing attention-grabbing investments is typically a losing strategy.

The Solution: Make Picking Stocks Marginal To Your Portfolio

Financial experts advise that most investors would be better off allocating the bulk of their funds to low-cost, well-diversified exchange-traded funds and mutual funds, which tend to be relatively inexpensive and less risky than individual stocks.

If you want to pick some of your own stocks, Hall suggests allocating only a small portion—at most about 10% to 20% of your portfolio—to these picks. This lets you “scratch that itch of picking a stock or company to own” while keeping most of your money in investments that tend to be less risky, he said.

When researching individual stocks, take the time to understand the fundamentals. Timing matters too. Instead of chasing stocks that have been rising, wait for the price to drop to a level that, based on your research, appears reasonable.

This type of research takes time—at least several hours to properly analyze a company’s industry, operations, management, and stock price charts. But it will pay dividends—perhaps literally—while bettering your odds of improving your nest egg over time.

The Bottom Line

Many individual or retail investors spend just minutes researching a stock before purchasing it. Much of that time is spent looking at recent information, such as the stock price over the past
month.

Most investors would be better off placing the bulk of their investable money in
low-cost, diversified funds. When investing in individual stocks, investors should understand the company’s operations and market, and wait for a price that, based on their research, appears reasonable.