Have you ever only listened to feedback that is similar or closely aligned with your initial thoughts and ignored opposing feedback from others? Perhaps everyone has had this experience at some point, and some people frequently encounter such situations. In psychology, this type of emotional response is scientifically referred to as "CONFIRMATION BIAS" - the confirmation effect.
In psychology, confirmation is a type of emotion that tends to seek out and trust information that supports their initial decisions while ignoring dismissive or opposing information. Confirmation arises from the fear of admitting they are wrong; they often have an inflated ego and self-esteem, always believing in their own assessment, coupled with a more primitive emotion of similarity - people tend to accept information that aligns with their own thoughts more easily.
Some of the most characteristic manifestations include:
- Only seeking supportive information: They only look for information and news that supports the project they are investing in, refusing to seek out opposing information.
- Ignoring warning information: When there are signs of a bad market or potential risks in an investment asset, investors ignore them because they do not align with their initial beliefs.
Biased information assessment: Investors consider positive information as "trustworthy," but negative information as "inaccurate."
Individuals with Confirmation Bias often have biased, narrow views when looking at the market and making poor decisions. They cling to these mistaken beliefs and continue to invest ineffectively, easily becoming victims of a "financial bubble."
So what is needed to overcome this? Seek diverse information, all sources of information, and filter it to gain a comprehensive view of your issue. Instead of saying, "It will probably ..." or "It’s bound to ...", use reason to analyze the market for investment. Listen to expert opinions for 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 involved should quickly get out. Let's share our thoughts and perspectives to discuss together.
