With our current information overload and volatile markets, making rational unbiased investment decisions is tough. These decisions require an enormous amount of discipline. “Confirmation bias” can lead you astray. In a recent article from Allan Gray, they delve into the subject of information swaying us into making counter-productive decisions.
In summary:
- Emotion can be our worst enemy when making investment decisions
- Confirmation bias – is when we gravitate towards news and opinions that will confirm our views. In our information overloaded world we will find some evidence to justify our actions.
How can we guard against this influence?
If you remain focused on a long-term goal don’t let short-term noise affect you. Generally unit trust investors should not worry about day to day events. Your fund managers will take these into account during their research process. Similarly a good independent financial advisor will adjust your overall portfolio as the long-term needs arise.
Become critical in what you read, see and hear: don’t let confirmation bias snooker you. Reserve the right to react only after careful consideration.
Talk to one of our Advisors now to start investing into the best portfolio for you