Have you ever only heard suggestions that are similar or closely aligned with your initial thoughts and ignored opposing suggestions from others? Perhaps everyone has encountered this situation to some extent, and some people frequently face such cases. In psychology, this emotional phenomenon is scientifically termed 'CONFIRMATION BIAS' - the confirmation effect.
In psychology, confirmation is a type of emotion that tends to seek and trust information that supports their initial decisions while simultaneously disregarding refuting or opposing information. Confirmation arises from the fear of admitting they are wrong; they often have an inflated ego and self-esteem and always believe in their own judgments, along with a more primitive emotion known as similarity - people tend to easily accept information that aligns with their own thoughts.
Some of the most characteristic manifestations are:
- Only seeking supporting information: They only look for information and news that supports their investment project and refuse to seek out opposing information.
- Ignoring warning information: When there are signs of a bad market or potential risks in investment assets, investors overlook them because they do not align with their initial beliefs.
Biased information evaluation: Investors consider positive information as 'reliable', but negative information as 'inaccurate'.
Those with Confirmation Bias often have biased, narrow evaluations when looking at the market and make poor decisions. They cling to those erroneous views and continue to invest ineffectively, easily becoming victims of 'Financial Bubbles'.
So what is needed to overcome it? Seek diverse information, all sources of information, and filter the information to gain a comprehensive view of your issue. Instead of saying 'It will definitely...', 'It must be that...', use reasoning to analyze the market for investment. Listen to expert opinions to gain a broader perspective. Always ask yourself, if you had to convince someone about your investment decision, how would you respond to opposing questions?
I find this type of emotion quite dangerous, so anyone affected should quickly get out of it. Please share your thoughts and opinions for discussion.