It's not FACT-It's OPINION!
We LOVE our opinions so much they become facts!
Posted January 10, 2011
For some reason, most visits to my local coffee shop yield interesting experiences. It must be my penchant for eavesdropping.
The other day, while waiting for my order, a man I know commented, "Well, now that the tax situation has been fixed, if Congress will get rid of Obama care, we'll have this economy back on track!" As I pondered his words, it occurred to me that what I was hearing was an oft-repeated statement of illogical thinking. To make things worse, it was spoken as fact even though it was anything but factual. It was opinion. Too many opinions disguised as facts can create a big mess, and I wasn't ready to let that happen.
I turned to this remote acquaintance and said, "Do you really believe it is just that simple? Do you honestly believe our tax system is fixed and that the elimination of a healthcare bill is all that stands between our current reality and economic success?" He started to answer but I was determined not to allow further air pollution. There was no doubt in my mind that his belief was absolute, and I was not interested in continuing a conversation that I felt certain would very shortly descend into doctrinaire debate. I excused myself and ran for the exit.
Driving home, I mulled over the prevalence of opinions stated as facts. The same tendency occurs with the information that we hear and read daily. We listen to the news and read magazines, newspapers, and journals, believing that what is communicated is factual. After all, facts feel safe, real, sturdy and reliable; opinions are less so. I suppose stating opinion as fact makes us feel right - and who doesn't want to feel right?
Recently, I met with a woman who was interested in working with a planner. She had interviewed several other planners in advance of our meeting and had come prepared with questions. She asked me about my experience, my investment philosophy and my firm's offerings. She then told me that one advisor had told her that in order to reduce risk she needed to be invested in commodities and that since he was plugged into the "Rolls-Royce" of information (and had five computer screens at his desk), his methodology was appropriate for her needs.
I was taken aback by the force with which she delivered this statement - as if his comments were a known fact. I leaned closer and replied, "Help me understand. Do you mean that because he has five computer screens and told you that he is plugged into a great information source, all that he said to you is fact?"
"Well," she answered, "I told him that I felt my current portfolio was too risky and he was very emphatic that buying a portfolio consisting of commodity ETF's, including gold of course, would lessen the volatility in my portfolio. He was very sure of himself. What I wish to know from you is your philosophy on investing and why I should put my trust in you?"
I allowed her question to linger in the air between us for a few moments. "I am happy to share my philosophy of investing with you, but I must warn you that the only thing factual about what you've told me is that the number of screens on his desk. Everything else is opinion. I can certainly tell you about my experience, our team approach, and our commitment to helping our clients live their dreams. But I cannot tell you whether my approach or other advisors' approaches will have a better outcome tomorrow, next week, next month or next year. In my opinion, it is more prudent to be diversified than not, and betting on sectors is riskier than broad diversification over the long run. A multitude of computer screens on a planner's desk will not help you live your dreams."
Needless to say, she was not thrilled with my response. She had obviously slapped a "fact" label on his opinions and for some reason wanted desperately to both believe and defend them. She had come to my office looking for not for another planner but for validation of the last one she'd met. As we said our goodbyes, I told her I would welcome any questions she might have after our meeting and hoped that she would not make a decision that would cause her more financial harm. Clearly confused and disconcerted, she left our meeting in a huff and I wondered if I would hear from her again. Probably not.
Listening to the news on my drive home, I heard how commodity prices, including gold, have fallen precipitously. Now that's a fact.