Seeing What You Want to See: The Danger of Confirmation Bias
Once we believe something about the market, an investment, or even ourselves, we naturally look for information that proves us right. That’s confirmation bias.
It makes us read headlines selectively, ignore inconvenient data, and hold onto flawed assumptions longer than we should.
Author Morgan Housel, in The Psychology of Money writes:
“Every financial decision is a bet on what you think will happen in the future — and you’ll never be right all the time.”
Smart investors don’t need to be right every time. They just need to stay humble enough to adjust when the facts change.
Reflection Question:
What financial belief or assumption have you held for a long time, and when was the last time you tested whether it’s still true?
Call our office for an unbiased, data-informed review of your financial plan to ensure your strategy fits today’s reality not yesterday’s beliefs.