The Law of Diminishing Returns: When Doing More Leads to Less

We live in a world that celebrates “more.” 

More productivity, more goals, more hustle, more results. On the surface this sounds great, after all, more should mean better, shouldn’t it? But there’s a strange paradox that many of us eventually run into: sometimes, trying to do more actually leads to less.

The same is true with investing.  

The Law of Diminishing Returns

At a certain point, piling on more tasks, projects, or expectations doesn’t yield extra results; it starts to backfire. This is the law of diminishing returns in action, and it shows up everywhere, including in your portfolio:

• At work: Staying late every night eventually makes you so tired that your efficiency drops. You spend twice the time getting half the quality.
• In fitness: Overtraining can stall progress or even cause injury, setting you back weeks or months.

In investing:

• More trades = more fees and taxes
  • Frequent buying and selling can eat into returns through transaction costs and short-term capital gains.
• More research = more noise
  • Trying to digest every headline and market opinion can lead to decision fatigue, analysis paralysis, or panic moves.
• More complexity = more mistakes
  • Constantly tinkering with your portfolio can make it harder to track performance and stay disciplined.

When we keep pushing past our natural capacity, we often get worse outcomes: not because we aren’t capable, but because we’ve crossed the line where “more effort” turns into “less impact.”

With investing, patience is rewarded, not hyperactivity.  

Why We Fall Into the Trap

Doing more feels like we’re taking control, and control feels comforting in an unpredictable market. When prices swing or headlines scream, sitting still can feel irresponsible. But more activity often comes from fear, not strategy.

Ironically, this attempt to manage risk can create more risk, turning temporary volatility into permanent losses. Here are some tips for life, and some tips for investing, that can help you sit still and stay calm when you need to.

The Power of Doing Less

Sometimes, the most powerful thing you can do is stop. Pause. Edit. Prune. Simplify.

• Do fewer things, better
  • Focus on what actually matters, and let go of the rest.
• Create space for creativity
  • Some of the best ideas come when we’re not grinding but letting our minds breathe.

In investing:

• Buy and hold quality investments
  • Time in the market usually beats timing the market.
• Simplify your portfolio
  • Fewer, well-chosen assets are easier to monitor and rebalance.
• Stay disciplined
  • Set a plan, automate where possible, and resist the urge to constantly adjust.

Doing less doesn’t mean doing nothing; it means focusing on what actually matters and ignoring the rest. 

The Takeaway

Don’t let the law of diminishing returns in everyday life, or investing, trip you up. More isn’t always better. Sometimes, when it comes to the markets, more complexity and more emotional decision-making can quietly erode your returns. The real edge comes from staying patient, disciplined, and selective: from doing less, but doing it wisely.

Doing less, with intention, might be the most productive thing you do all year.