On The Contrary
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So, you\\u2019ve decided that you are going to purchase a new vehicle and you\\u2019ve narrowed your focus down to one particular make and model. You\\u2019ve even determined the color along with all the bells and whistles you\\u2019d like on this new gem. Then, you can\\u2019t help but notice your desired automobile everywhere \\u2013 on the freeway, driveways in your neighborhood, the parking garage at work, etc. It \\u201cfeels\\u201d like now that you\\u2019ve concluded your target buy that there has been a dramatic increase this week in the prevalence of this particular vehicle.
\\nYou wonder\\u2026 Did your neighbors go through the same process you are experiencing and just beat you to the punch at the car dealership? Is your community just one step ahead of you regarding this dramatic increase in your dream car? The answer is no. You are experiencing the Baader-Meinhof phenomenon (or frequency illusion). Your increased awareness is leading to a cognitive bias that this particular thing is more prevalent. One of those weird tricks our brains can play on us.
\\nLet me take this one step further, what is your actual fear? That you will lose your job? That you will outlive your nest egg? Again, the answer here could be different for all of us, but peeling back the layers is important. I\\u2019ve had many conversations recently where I have seen the fear of recession paralyze individuals from being able to design and execute aspects of their financial plan. The \\u201cwhat-if\\u201d enemy has people absolutely frozen in their tracks. By identifying and calling out your fear specifically you can measure and address this concern in your planning.
\\nToday, I thought it would be both appropriate and interesting to zoom in on some contrarian indicators. These are measuring sticks or alerts that may encourage us to stray from the herd.
\\nLinks mentioned in this episode:
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