Think about market predictions.
We are very, very bad at this.
Everyone knows that. I haven't met an investor who truly believes that market predictions are accurate or useful overall. However, there is still a huge demand for predictions, whether from the media or financial advisors.
Why is that?
Psychologist Philip Tetlock once wrote: "We need to believe we live in a predictable, controllable world, so we consult experts who sound authoritative, and they promise to satisfy that need."
Satisfying that need is a very fitting description.
Wanting to believe that things are under control is an emotional craving that needs to be fulfilled, rather than an analytical problem that needs to be calculated and solved.
The illusion of control is more persuasive than the uncertain reality, so we always cling to those stories that allow us to control the outcomes.
—— "The Wealthy Mindset"