People tend to search for information that confirms their view of the world and ignore what doesn’t fit. In an uncertain world, we love to be right because it helps us make sense of things.
We do this automatically, usually without realising; partly because it’s easier to see where new pieces fit into the picture puzzle we are working on, rather than imagining a new picture.
For example if we believe that a particular type of property or a specific region will make for good investing, then we tend to only seek out news and information that supports that position.
Confirmation bias also prevents us from looking objectively at an investment we’ve already made. Once we’ve bought a property we look for information to confirm that we’ve made a good investment while as the same time ignoring information that may indicate the investment may be a questionable one.
One way to counter confirmation bias is to read things you’re going to disagree with. In other words read all you can from reputable sources, whether it’s confirming your original view or not. Another is to look for reasons your strategies could be wrong, rather than right.
We do this automatically, usually without realising; partly because it’s easier to see where new pieces fit into the picture puzzle we are working on, rather than imagining a new picture.
For example if we believe that a particular type of property or a specific region will make for good investing, then we tend to only seek out news and information that supports that position.
Confirmation bias also prevents us from looking objectively at an investment we’ve already made. Once we’ve bought a property we look for information to confirm that we’ve made a good investment while as the same time ignoring information that may indicate the investment may be a questionable one.
One way to counter confirmation bias is to read things you’re going to disagree with. In other words read all you can from reputable sources, whether it’s confirming your original view or not. Another is to look for reasons your strategies could be wrong, rather than right.
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