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Opinion
John Authers

Our Bubble Biases Deserve the Closest Scrutiny

Given the potential consequences, it behooves both bulls and bears to consider how they may be wrong.

It pays to re-examine our biases.

It pays to re-examine our biases.

Photographer: Keystone/Archive Photos/Getty Images

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We all face one risk when investing that's greater than perhaps any other: the risk that we are wrong. It’s all too easy to be convinced by your own logic and let confirmation bias do the rest. When investing, it’s worth having conviction, but it’s also necessary to take out some insurance against the possibility of being wrong, even if this dilutes returns.