Seeing What We Want to See: Understanding Confirmation Bias

May 1, 2026

Markets have entered May at fresh all-time highs after one of the strongest months in several years. At the same time, geopolitical tensions in the Middle East remain a steady presence in the headlines, energy prices have continued to push higher, and questions about valuations and the broader economic cycle have not gone away. It is the kind of environment where almost any view of the market can be supported by the day’s news, depending on where an investor chooses to look.

Behavioral finance refers to this tendency as confirmation bias. It is the natural human habit of seeking out information that supports what we already believe, while quietly setting aside information that challenges it. Investors who feel cautious have no trouble finding articles, forecasts, and commentary that justify stepping aside. Investors who feel optimistic find an equally large body of content supporting the case to remain fully invested. Both can feel entirely confident in their reasoning, even though they are responding to the same underlying market.

The challenge is that markets do not move in response to any single narrative. They reflect the combined judgment of millions of participants weighing earnings, interest rates, geopolitics, and sentiment all at once. When investors filter that complexity through a single point of view, the result is often a portfolio shaped more by emotion than by long-term strategy.

A disciplined approach begins with recognizing that the headlines feeling most compelling are usually the ones that already match what we feel. The more useful question is rarely what today’s news suggests we should do, but whether our plan still reflects our long-term goals, regardless of which narrative happens to be winning the week.

None of this is a call to ignore what is happening in the world. Geopolitical developments, central bank decisions, and earnings results all matter, but they rarely matter in the way short-term commentary suggests. Long-term outcomes are shaped far more by consistent decisions made across many environments than by any single response to any single moment.

Past performance is not indicative of future results. This commentary is for informational purposes only and should not be construed as investment advice. All investments involve risk, including possible loss of principal.