A Biased Media Diet Harms Your Financial Health
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Part of supporting your clients’ financial wellbeing requires a good grasp of world economic, political, and financial events and how they apply to clients personally and individually. It’s also important as a financial therapist to understand and validate clients’ various viewpoints.
Not only do I spend considerable time following current events, but it matters that the data and news I evaluate be as factual and accurate as possible. Yet balanced news sources are few and far between. For example, if one person only gathered their information from CNN and another person got theirs from FOX News, their world views will be 180 degrees apart.
In part this is because most of us are affected by what is called “confirmation bias.” This is a tendency to focus on information that confirms and underscores what we already believe, and to ignore or discount sources that contradict what we believe. Confirmation bias is made even stronger by algorithms in social media and internet searches. These track our online preferences and offer us more of similar information, so the cycle of belief-confirmation-belief-confirmation becomes increasingly narrow.
As I have seen repeatedly throughout my career, behavior like selling out of the stock market or going all-in, solely on one’s political beliefs and biases, is a recipe for financial disaster.