Confirmation bias is our tendency to:

• Seek information that supports our existing views

• Ignore or dismiss information that challenges them

• Interpret ambiguous facts in a way that fits our story

It’s not a moral failing – it’s a human shortcut. But in the age of rolling news, social media and algorithms, that shortcut can become seriously dangerous.

The Trump / BBC Example – Why Context Matters

A recent high-profile case shows how powerful this can be.

In 2024, the BBC’s Panorama documentary Trump: A Second Chance? used an edited clip of Donald Trump’s 6 January 2021 speech. The programme spliced together sections that were almost an hour apart, creating the impression of a single, continuous quote that sounded like a much more direct call to “fight like hell” and march on the Capitol. Crucially, it left out the part of the speech where he told supporters to protest “peacefully and patriotically”.

After internal and external criticism, the BBC accepted that the edit was misleading, apologised publicly and agreed not to rebroadcast the programme in its current form.

Here’s the important point for confirmation bias:

• If you already believed Trump was intent on provoking violence, that edited clip probably felt like “proof”.

• If you already believed the BBC has a political bias, the story around the edit probably felt like “proof” of that too.

Same incident, different priors, completely different emotional reactions.

Neither reaction really engages with the nuance: the full speech included both heated rhetoric and the “peaceful” line; the BBC is capable of both high-quality journalism and serious editorial mistakes.

Confirmation bias loves the simple version, not the complex one.

From Newspapers to Newsfeeds – Why It’s Getting Harder

When I was growing up, there was no social media. News came from:

• The radio

• A handful of TV bulletins

• Newspapers

• Books and long-form articles

If you were studying history, you’d routinely compare two or three accounts, look at who wrote them, and piece together your own view. You expected to interpret, to weigh, to question.

Today, the volume is higher and the filters are smarter:

• Algorithms learn what you click on

• You’re shown more of what you already agree with

• Outrage and certainty get more engagement than nuance

The result? We can easily end up:

• Repeating, almost word-for-word, what our preferred outlet or commentator said last night

• Mistaking familiarity (“I keep hearing this”) for truth (“It must be true”)

We haven’t lost the ability to interpret – but we’re out of practice.

How This Shows Up in Investing

Exactly the same patterns appear in the investment world.

Passive vs Active – Everyone Has Their Favourite Evidence

Take the long-running debate between passive and active investing:

• Passive advocates will often point to SPIVA reports, which show that many active funds fail to beat their benchmarks over time.

• Active advocates will highlight specific asset classes – like parts of the fixed income market – where active managers may add value, or show periods where active risk management helped avoid severe drawdowns.

Recently I saw an active fixed-income manager present data suggesting that, in certain bond markets, active approaches had delivered better risk-adjusted returns than pure index tracking. The criticism that followed didn’t just challenge the data – it focused on who was presenting it (“Well, they would say that, they’re active managers.”)

But the response itself came from an index provider – who also has commercial and philosophical skin in the game.

In other words, both sides were highly motivated to believe their own interpretation. Confirmation bias all round.

The danger for investors is this:

If you only ever read evidence from “your” side of the argument, you can easily end up with an investment philosophy that feels unshakeable – but is only partially informed.

Algorithms, Echo Chambers and “What We Want to See”

Once you start down a particular route, the online world will help you stay there.

Search for “evidence passive investing doesn’t work” and see what you get. Then search “evidence active investing doesn’t work” and compare.

Algorithms don’t ask, “Is this balanced?” They ask, “Will this keep you engaged?” That’s a perfect environment for confirmation bias to thrive.

Over time:

• Your feeds become narrower

• Your confidence becomes higher

• Your ability to see the other side becomes weaker

And that’s not a great starting point for long-term financial decisions.

Why My Dyslexia Helps – The “Superpower” of Asking Why

I often joke that my superpower is being dyslexic.

Written exams were never going to be my strength. But dyslexia has shaped the way my brain approaches information:

• I’m naturally inquisitive

• I like to debate and test ideas

• I’m rarely satisfied with “X is right because…” – I want to understand the why

That constant questioning can be tiring for people around me, but it’s incredibly useful when you’re dealing with money, risk and long-term planning.

It pushes me to:

• Read the speech, not just the clip

• Look at the underlying data, not just the headline chart

• Ask what’s not being shown, as well as what is

You don’t need dyslexia to do this – but you do need to give yourself permission to be curious and occasionally uncomfortable.

Practical Ways to Challenge Your Own Confirmation Bias

So what can we actually do about it?

Here are some simple habits that help:

1. Actively seek the opposite view

   • If you’re pro-passive, read a serious, data-driven defence of active management.

   • If you’re convinced a politician is either a hero or a villain, read a calm, critical piece from the other side.

2. Check the primary source

   • Watch the longer clip, not just the 20-second excerpt.

   • Read the full research paper, not just the pull-quote in a marketing document.

3. Ask: “Who benefits if I believe this?”

   • A media outlet may benefit from outrage and clicks.

   • A fund group or index provider may benefit from pushing one narrative over another.

4. Separate facts from interpretation
   Try literally writing it out:

   • Facts: what we know actually happened or what the numbers show.

   • Interpretation: the story being built on top of those facts.

5. Slow down big decisions

   • If a headline or chart makes you want to act immediately – pause.

   • Sleep on it. Talk it through. See if you still feel the same tomorrow.

Bringing It Back to Your Money

Ultimately, none of this is about winning arguments online. It’s about:

• Making better financial decisions

• Staying open to new information

• Avoiding the trap of “I’ve always believed X, therefore X must be right”

So next time you come across a strong opinion – from me, from a news channel, from a fund group, from a politician – try this:

Check it. Discuss it. Dig around.

If it shifts your thinking even a little, that’s progress.
If it doesn’t, the fact you’ve done the work is still a positive.

Let’s not get sucked into holding tightly to whatever we first read and assuming it must be right. The world – and your portfolio – deserve more curiosity than that.