Legendary Investor Secret #24: How Confirmation Bias Blinds You To Great Investments

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Legendary Investor Secret #24: How Confirmation Bias Blinds You To Great Investments

Are you losing out on good investments due to confirmation bias?  We often want clear, definitive answers to how to invest, but in financial markets and social media, this can be tricky. We tend to look for information that supports what we already believe, known as confirmation bias, and social media makes this worse by feeding us content that aligns with our views, creating echo chambers. The takeaway is that while data can guide us, it doesn't provide absolute certainty, and we need to stay aware of our biases and the limitations of the information we consume. Today we discuss... 

  • Understanding data interpretation is crucial; it's not about definitive conclusions but about probabilities.
  • Our tendency to see patterns where none may exist, like with the inverted yield curve and recessions, shows how we seek certainty.
  • Market predictions are complex; events like the 2011 gold crash challenge simplistic explanations.
  • Half-truths, more than outright lies, mislead us because they seem plausible but aren't entirely accurate.
  • Social media algorithms create filter bubbles, reinforcing our biases and limiting exposure to diverse viewpoints.
  • The influence of confirmation bias in political and social beliefs is profound, shaping our perceptions of reality.
  • Financial beliefs, like linking money printing directly to inflation, oversimplify complex economic realities.
  • Chart crimes and misleading visuals can distort perceptions, leading to erroneous conclusions about trends.
  • Bitcoin's price movements post-halving illustrate the complexities of market predictions and speculative fervor.

"Cash is not trash... Cash is King"   - Kirk Chisholm

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Today's Guest:  Kirk Chisholm

Kirk Chisholm is a Wealth Manager and Principal at Innovative Advisory Group, an independent Registered Investment Advisor located in Lexington, MA. He has been providing wealth management services to individuals, executives, entrepreneurs, and their families since 1999. He is an outside the box thinker, risk manager, inflation expert, blogger, podcaster, and all-around interesting guy. Kirk is dedicated to developing lasting relationships with all of his clients and their families. One of the benefits of working with Kirk is his patience, empathy, and his ability to provide clear and easy-to-understand explanations to complex financial topics.


Kirk developed a unique philosophy for the wealth management industry called Risk Management First. The medical field has a similar way of thinking of “first do no harm”. This philosophy focuses on risk management for clients in all aspects of their lives in ways the industry does not address. Risk management does not stop with investments. It also requires working closely with other professionals to address areas of their financial lives not currently being met.


In 2008, Kirk co-founded Innovative Advisory Group to address the needs not being addressed by the wealth management industry. It started with specializing in alternative assets held in retirement accounts (i.e. self directed IRAs/401ks). Then the company expanded into the specialization of college funding (i.e. planning, strategy, and paying the least possible for a high quality education), Risk Management First, exit planning for business owners, advanced planning (estate, tax, etc), and providing practice management and leadership training to other financial advisors, accountants and attorneys. 


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