We process an enormous amount of information every day.
So it is hardly surprising that we look for shortcuts.
We tend to make the easiest decision available.
And we resist change, because change asks more of us.
I notice this most when I write.
People read something I have said and fill in the gaps.
"George likes active funds." And off it goes.
The label sticks, and the nuance disappears.
Why We Crave a Binary Answer
When we believe something, we want it to be true.
We seek out information that confirms it, and quietly ignore the rest.
This is not a character flaw. It is human nature.
Psychologists call it confirmation bias — the tendency to notice what fits our view and dismiss what doesn't.
The research is consistent on this point.
Investors who favour active management are more likely to seek out information that supports active management.
Those who favour passive do exactly the same in reverse.
Experience offers no protection, either.
Studies show seasoned professionals fall into the same trap as beginners.
We are all, to some degree, seeing what we want to see.
A Lesson From School
When I was at school, my house master told me I would be good at debating.
He was right.
I do hold strong views. I am not going to pretend otherwise.
But here is the part people miss.
The reason I enjoy a debate is that I want to learn from the other side.
However firm my opinion, I have always believed outcomes depend on the individual.
What works for one person may not work for another.
That belief sits at the heart of how I think about investing.
This Is True of Investing
My view is not that active is better than passive, or the other way round.
Both can work. Both can fail.
The real key to good investing is simpler, and harder.
It is the research. It is understanding what you actually own.
That is the richness of investing — and it lives in the detail, not the label.
The industry loves to sort everything into two neat boxes.
Active or passive. Growth or value. Right or wrong.
But real investing sits on a spectrum, not in a binary.
Where the Tools Come In
This is also where some of my recent work with AI comes in.
I have been building simulations that test ideas rather than assume them.
Run a scenario. Change an assumption. See whether the value is really there.
The same approach works for retirement income.
Build a tool, test the thesis, and let the evidence shape the conclusion.
It is a far better habit than deciding the answer first and hunting for support afterwards.
Money Wise UK View
Our richness does not come from chasing binary outcomes.
It comes from staying open to other ways of thinking.
The strongest opinions are the ones that have been tested against the alternative.
So the next time something feels obviously right, pause.
Ask what you might be ignoring.
That question, more than any single answer, is where the learning lives.
Was this worth a coffee? Not a flat white. Just a regular, sensible £2 coffee. If this helped, feel free to buy me one. If it didn't, keep your money — that's only fair.
Add comment
Comments