Do we want to be thoroughly educated on options for our decision-making? Or do we want to prove that what we already think is correct? In our day-to-day lives, there is a big difference between doing unbiased, objective research for the sake of exploring multiple options in order to learn, vs. going “out there” to find ways to simply prove our preconceived points of view. One exhibits our desire for education, perspective and possibilities. The other exhibits our ego, fear of being wrong, and our “being stuck” in one way of thinking. The latter is what happens when we get consumed by “Confirmation Bias”.
Confirmation Bias is a behavior we have involving our desire to seek out proof that what we believe and what we know to be correct is surely correct. We tend to ignore any signs of a different perspective or opinion. Sometimes we ignore factual data and information that could prove critical in helping us make good decisions. We simply have an ulterior motive to prove we are right…to be able to say, “I told you so.” Our preconceived notions and beliefs tend to put blinders on our ability to be open-minded. The result is that we may make decisions that are less optimal…for our life, business, friendship, relationships, financial life, health…the list could go on.
In regard to our financial lives, there are so many factors that immediately jump out and lead us down the slippery discriminatory path of Confirmation Bias. We have the opinions of our elders, from a time when the financial landscape of our economy may have been very different than what we experience now. We have the opinions of our friends, who may be sharing these opinions without substantiated support or proof. We have the media, who’s ulterior motives might be driven by sales or other business-related expectations. There is an ocean of information available at our fingertips. When we are seeking comfort in trying to support our preconceived notions, finding articles, videos, quotes and opinions of others that support our ideas might be easy…but it doesn’t mean it’s correct, or the best information to help us make the best decisions possible.
How do we combat Confirmation Bias?
- Put our ego aside for the sake of expanding possibilities and taking the opportunity to learn. Seek the truth as opposed to proving we are not wrong.
- Seek alternative perspectives and knowledge from sources that prove to be different than our own. Disagreements can lead to healthy, informative outcomes that can strengthen our opinions. Be open to being corrected, to expanding our thoughts and to adopting alternate perspectives.
- Ask great questions. Don’t ask questions that are leading to support your opinion, but rather, ask open ended questions that encourage and invite constructive commentary.
- Keep open lines of communication. Don’t just peek on the internet at one article then close down the channels of learning.
- “Google Better”. When researching online, don’t just look for the content of what is being said, but look at who is saying it. What is their angle, their perspective, their motive. Look for unbiased, objective information.
It takes humility, grace, inquisitiveness, curiosity, patience and engagement to do our best due diligence. But in order to make good financial decisions, or decisions about any matter, having an enriched platform of knowledge, experience and options might prove most helpful. And if down the road, you see that these steps have helped you make better decisions, don’t forget that “I told you so”.
Reference: Confirmation Bias Definition | Investopedia http://www.investopedia.com/terms/c/confirmation-bias.asp#ixzz4nL5owQ9s