How to Be Positively Skeptical: Part 2

In previous installments of our “How To Be Positively Skeptical” series, we covered the many forces that tease us into falling for misinformation. Bottom line, our brains are hardwired to lead with fight-or-flight instincts ahead of rational resolve. As such, our critical thinking often plays second-fiddle to rash reactions such as fear, excitement, overconfidence, and regret.


“All media shares one thing: Someone created it. And it was created for a reason. Understanding that reason is the basis of media literacy.”

Common Sense Media


In the financial jungle, it’s essential to look before you leap at emotion-triggering misinformation. Here are five “do’s” and “don’ts” for doing your best fact-finding due diligence.


  1. Do be positively skeptical. In the courthouse, a defendant is presumed innocent until proven guilty. When managing information overload, we recommend you default to exactly the opposite: When in doubt, remain in doubt until you’ve done your due diligence.


Also watch out for confirmation bias. If you want something to be true, you’ll be more inclined to believe it is. Likewise, if you wish something weren’t so, you’ll assume it probably isn’t.


  1. Do question the motives. As suggested above, everything you see, hear, or read is driven by someone’s incentive for sharing it. This helpful Life Kit Comic from National Public Radio describes at least four potential motivations: self-interest, malicious intent, financial gain, and/or genuine altruism. Determining which motivations are most likely at play suggests how readily to accept a claim as the whole truth, and nothing but.


Also watch out for familiarity bias. We take mental shortcuts to more quickly trust people who are familiar to us, whether or not our trust is well-placed.


  1. Do consider the source. Motivation aside, does the source actually know what they’re talking about? If they’re sharing their own insights, do they have the credentials and/or experience to be accurate and objective about the subject matter? If they’re reporting others’ insights, have they first done their own due diligence? Is their “evidence” fact-based, first-hand, and objectively considered? Or is it opinionated, emotionally charged, and largely circumstantial?


Also watch out for blind spot bias. We can more objectively spot others’ behavioral biases than we can recognize our own. This is one reason why even a well-intended individual may be unaware of their own misperceptions.


  1. Don’t let repetition replace reality. Believe it or not, simply repeating a lie can make it more believable. Citing a pair of studies from the Journal of Experimental Psychology, this Wall Street Journal columnist reported, “When people hear a false claim repeated even just once, they are more likely to let it override their prior knowledge on the subject and believe it.” This all too real “illusory truth effect” explains how effective marketing campaigns often work. It also explains how we can fall for fast-moving falsities, whether unwittingly or intentionally repeated.


Also watch out for hindsight bias. Hindsight bias tricks us into altering our memories to reflect current reality. In other words, once you decide to believe a repeated claim, you may forget you didn’t believe it the first time.


  1. Don’t rush. Especially in money management, anything that is important today will still be important tomorrow. Take your time, ask critical questions, and ensure you understand the ramifications before you make any move. The same applies when sharing tantalizing social media posts. If something strikes you as either outrageous or too good to be true, avoid getting caught up in the heat of a moment, lest you accidentally fan the flames of an illusory truth.


Also watch out for herd mentality. Herd mentality intensifies our greedy or fearful reactions to breaking news. We are prone to run in whatever direction everyone else is headed.


How Do You Do Your Due Diligence?

Of course, nobody can research every claim they come across. There are only so many hours in the day! So, what are some practical steps for efficiently differentiating fact from fiction? We’ll cover that in our next, and final installment in our “How To Be Positively Skeptical” series.


There are only so many hours in the day to do all the fact-checking you’d like to when deciding who and what to believe.  How do you approach this never-ending challenge? We suggest conducting your due diligence like a tournament. First, eliminate the weakest contenders, then conduct deeper due diligence on the finalists.


Truths and Dares

This does NOT mean you should disregard all opposing viewpoints. As you may recall from our last piece, confirmation bias causes us to favor information that supports our beliefs and ignore that which contradicts them. But what if your beliefs are mistaken? One of our goals is to combat confirmation bias by considering any reasoned argument that:


  1. Is well-informed, with an objective perspective and minimal conflicts of interest
  2. Prioritizes judicious decision-making over strident calls to immediate action
  3. Inspires a thoughtful approach to touchy topics, instead of feeding fervent fires


In other words, when considering whether a claim is credible, it doesn’t matter whether or not you agree with it. What matters is whether it represents a genuine pursuit of the truth.


Be particularly wary when you come across startling information – good or bad – filled with superlatives. As this Wall Street Journal article reports, we are all subject to extremity bias, or “our tendency to share the most extreme version of any story, to keep our listeners rapt.” Thus, even if a provocative claim contains an element of truth, it may be overblown.


Once you’ve eliminated the weakest claims, you can fact-check the rest.


Start With a Reality Check

Does a claim make you wonder, “Really?” Especially if it’s a relatively extreme position, a good first step is to refer to one or more fact-checking resources, such as Snopes, Vote Smart, or While none of these are infallible, you should be able to at least filter out any flagrantly false claims before sharing them with others or acting on them yourself.


Just Google It

Next, use your favorite search engine to learn more. Don’t just depend on the most popular hits. Just as you wouldn’t turn to tabloids to tell you whether aliens really exist, you should avoid the tabloids’ virtual equivalents and turn to reputable sources offering educated insights.


Examples of more robust sources include academic and similar philanthropic institutions, respected journalists, government publications, quality trade organizations, and subject matter experts with appropriate credentials.


As we’ve covered before, be sure to consider the source’s dominant motivations, their depth of experience, and their thoughtful vs. emotional approach. Ideally, identify multiple credible sources to substantiate, strengthen, and/or clarify any given claim.


Seek the Source

Merely stating a fact does not make it so! When sharing facts and figures, the author should explain how they came up with them, and/or cite a reputable source. Beware if it’s instead left unclear just where the claim came from.


Whenever possible, take the time to verify and confirm the validity of original sources. If the author has not provided the links, an Internet search often uncovers them. By the way, don’t be too daunted to read through academic studies or similar reports. Like any skill, it gets easier over time. Plus, cited information is often found in the study’s abstract, introduction, or conclusion.


Academically Speaking

While we’re on the subject of academic research, let’s take a closer look at its use, and potential abuse. At least in theory, academics are motivated by discovering and publishing their most objective findings. As such, their findings are typically the gold standard for evidence-based understanding.


That said, even academics are human. They are subject to the same biases and misjudgments as the rest of us. Highest priority should be given to studies that exhibit a disinterested outlook; are based on robust data sets; can be reproduced by others and repeated across multiple environments; and have been published and rigorously peer-reviewed.


That last point is important, since an academic’s peers are best positioned to spot any flaws the author(s) may have overlooked. Consider this Scientific American report, describing how a set of psychologists peer-reviewed a series of studies on how social media impacts our youth. While it may be headline-grabbing to publish evidence suggesting smartphones are bad for children, this peer review suggested that misleading data analyses and overstated results needed to be replaced with “a much more nuanced story.”


The Advisor’s Essential Role: Separating Fact from Fiction

If we’ve not made it clear by now throughout this series, our own and others’ behavioral biases present among your greatest hurdles in separating fact from fiction.


As information consumers, we’re inherently susceptible to falling for fake news (especially when we’re tired, by the way). Our challenge is further aggravated by the droves of information out there that is unwittingly or deliberately false.


We hope this series has strengthened your “B.S. detector” as you make your way in the world. At least when it relates to financial planning and investment management, we also consider it among our greatest roles as a financial advisor to help families strengthen their financial literacy, see past their factual blind spots, and separate wealth-building facts from fantasy.


Please let us know if we can help you with the same.






Woodstone Financial, LLC is a fee-only financial advisor, specializing in retirement planning, comprehensive financial planning, and investment management firm located in Asheville, North Carolina.   Contact us to learn more about our services.

How to Be Positively Skeptical

Whether you’re considering an investment opportunity or simply browsing various media for insights and entertainment, it has become increasingly obvious: You cannot believe everything you see, hear, or read. Much of it is “overdramatic.” Too much of the rest is just plain wrong.


Thus it falls on each of us to be positively skeptical in our search for knowledge.


To be positively skeptical, we must continue to think and learn and grow.
But we also must aggressively avoid falling for hoaxes and hype.


Social Media: An Aggravating Allure


Of course, selling proverbial snake oil and falling for falsities is nothing new. As investors, citizens, and individuals, it will always be our task to remain informed purveyors of the truth. But in today’s climate of information overload, this is no easy task. The very features that make online engagement so popular also make it a powerful forum for sowing deceit and confusion.


First, it’s now all too easy to share a claim far and wide, long before it’s been through any sort of reality-check. One or two clicks, and it’s on its way.


Second, evidence suggests false online news spreads faster than the truth. In a March 2018 Science report, “The spread of true and false news online,” a team of MIT researchers analyzed approximately 4.5 million tweets from some 3 million people from 2006–2017. They found that “Falsehood diffused significantly farther, faster, deeper, and more broadly than the truth in all categories of information.”


The authors also found that “human behavior contributes more to the differential spread of falsity and truth than automated robots do.”


In other words, we can’t just blame it all on “the bots.” We owe it to ourselves to be vigilant.


A Rigorous, But Rewarding Role


The challenge is, few of us actually enjoy engaging in detailed fact-checking. That’s not entirely our fault. It’s likely due to a multitude of mental shortcuts, or “heuristics,” which we have honed over the millennia to make it through our busy days.


In their landmark 1974 paper, “Judgment under Uncertainty: Heuristics and Biases,” Nobel laureate Daniel Kahneman and the late Amos Tversky are widely credited for having launched the analysis of human heuristics, including when they are most likely to lead us astray.


Essentially, we’re more likely to share and comment on a social media post, than to take the time to substantiate its accuracy. When considering an enticing investment opportunity, we find it easier to skim the marketing materials, than to dig for deeper understanding. Academic research that refutes current assumptions can be dense, and difficult to decipher; if a particular assumption is already widespread, we’re prone to simply accept it as fact.


Unfortunately, there are legions of cunning con artists and slick sales staff who know all this, and have weaponized our behavioral biases against us.


“[T]he challenge for all investors is to consume the news without being consumed by it.”

Jason Zweig



The Usual Emotions in Unusual Times


As fate would have it, we introduced this series earlier this year, before COVID-19 seized almost every headline around. If anything, current events have made this series even more important. Thoughtful, sober answers to our most pressing questions must now compete against a deluge of emotional misinformation that can be as virulent as the ailment itself.


First of all, there’s nothing wrong with having emotions – even strong ones.


For example, many of us may be grieving the loss of the “normal” life we used to have just a few months ago. It’s important to acknowledge these feelings. In a recent National Public Radio piece, behavioral counselor Sonya Lott explains how unattended grief can impair “every aspect of our being – physically, cognitively, emotionally spiritually …” and financially, we might add. Lott says, “We can’t heal what we don’t have an awareness of.”


In other words, emotions are not only unavoidable, they’re essential. But remember:


When you put your feelings in the financial driver’s seat, they will steer you toward what your instincts would prefer, rather than what reason might dictate.


Behavioral Finance and Emotional Investing

There is an extensive field of study dedicated to understanding how our instincts and emotions often interfere with our ability to make rational financial decisions. This study is called behavioral finance. Suffice it to say here, every investor faces strong, hardwired temptations to:


  • Chase illusory trends
  • Fear the very investment risks that are expected to generate our greatest rewards
  • Regret even our most sensible decisions in the face of minor setbacks
  • Disregard the most durable data
  • Overreact to breaking news and emotion-triggering language


On that last point, words alone can create a potent brew of emotions. Guns, abortion, climate change, and immigration probably generate a rise out of you, one way or the other. The same goes for financial catchwords: crashing, soaring, crisis, and opportunity.


Strong feelings, while natural, WILL create cognitive blind spots in your reasoning. Add the speed and omnipresence of the Internet, and it becomes even easier to lead with your emotions.


“There’s no room for facts when our minds are occupied by fear.”

— Hans Rosling, Factfulness


Emotional Marketing for Better and for Worse


The power of people’s emotional response is so strong, academics like Wharton School’s Jonah Berger have written books on how marketing teams can appeal to them – for better or worse.


In his book “Contagious,” Berger describes six triggers companies can use to amplify their marketing messages, including playing to your emotions. In this podcast, he observes: “Companies recognize, ‘Hey, if we can get people to feel emotional, we’ll get them to talk and share.’ … You need to design content that’s like a Trojan horse. There’s an exterior to it that’s really exciting, remarkable and has social currency or practical value. But inside, you hide the brand or the benefit.”


Emotion-triggering communications aren’t inherently wrong or bad. Your favorite causes use them to nudge you into giving more generously. We ourselves use them in messages just like this one, to encourage you to embrace your own best investment interests. You may not realize it, but you probably use them as well, to advance your own heartfelt beliefs.


Unfortunately, not every application is as well-intended. Profit-hungry wolves on Wall Street won’t think twice about preying on your hopes and fears. Popular and social media alike are forever awash in fervent calls to action. Identity thieves are the ultimate masters of emotional trickery in their quest to rob you of your wealth.


Powering Past Your Emotions


So, as an evidence-based investor, how do you navigate past these and many other emotional traps? It can help to have an objective advisor point out your own behavioral blind spots. But you can help yourself as well.


Has something you’ve seen, heard, or read left you “stirred up”? Again, we’re not suggesting you should repress every feeling. But the more aggressively an appeal tugs at your emotions – in fear, anger, excitement, or elation – the more important it is to avoid being consumed by it.


Especially if it involves your financial well-being, we strongly recommend hitting the pause button before making any next move. Take your emotional “temperature.” Wait for the heat to subside. Most importantly, take some time to conduct extra due diligence before taking the bait.


This means it’s as important as ever to sharpen your skeptical lines of defense. Granted, it takes more time to carefully separate fact from fiction. But the upfront due diligence should ultimately save you far more time, money, and personal aggravation than it will ever cost you.


Being positively skeptical should richly reward you in the long run.


Woodstone Financial, LLC is a fee-only financial advisor, specializing in retirement planning, comprehensive financial planning, and investment management firm located in Asheville, North Carolina.   Contact us to learn more about our services.

WCU Biltmore Park Class Dates – 10/27 and 10/29

Are you prepared for one of the biggest transitions in your life?


Tuesday, October 27 and Thursday, October 29


Classes are 4:30-6:00 PM Via Zoom

We hold our current classes on Zoom.  Tuition is $59 per person (or couple).



(Click link above to register for Retirement Planning Today through WCU’s website)


Contact Instructors Here

(Click link above to contact instructors with any questions)


Tuesday, October 27 & Thursday, October 29, 2020
4:30-6 pm
Live, online instruction via Zoom
Registration fee: $59


Night 1: Social Security Planning: What We Know and What We Don’t Know

Tuesday, October 27   4:30 – 6:00 pm

Social Security retirement benefits represent over half of the household income for a majority of retirees today.   Despite the dependence most people have on this critical source of income, there are pressures threatening the future of Social Security.  As of 2018, Social Security is projected have sufficient resources to pay 100% of scheduled benefits until 2034. Beyond that point in time, payroll tax revenues alone, will only be sufficient to cover only about 79% of scheduled benefits initially, and the percentage will decline to 74% by 2092 (based on the current formula).

This widely popular program faces an uncertain future. In 1950, as the baby boom was just beginning, there were 16.5 active workers for each Social Security beneficiary. Currently, there are 2.8 workers per retiree. And it’s projected that by 2035, the ratio will fall to 2.2 workers for each beneficiary. Meanwhile, the number of Americans collecting Social Security benefits is expected to grow from about 62 million today to 88 million by 2035.

It is highly likely that Social Security will undergo some major changes in the coming years, but do we know what these changes will be?

This course will walk through the knowns of Social Security Planning today, and address the critical questions around the future of Social Security when planning for your future.  We will cover:

  • History of Social Security, and this historical legacy impacts the strength of the program today
  • Delayed retirement credits
  • Early filing and Retirement Earnings Test
  • Windfall Elimination Provision
  • Spousal benefits and Divorced Spouse Benefits
  • Survivor Benefits
  • Medicare Benefits
  • Taxation of Social Security
  • Restricted Applications
  • And more

Night 2: After the Last Paycheck: Retirement Income Strategies

Thursday,  October 29, 4:30 – 6:30 PM  

What happens when you retire?  Among many things, there is one common experience: Your financial focus takes a dramatic shift. 

For most Americans, this shift means that instead of striving to accumulate assets, you’ll need to figure out how to withdraw assets in an efficient way for income.  What if you encounter turbulent markets soon after retirement?

The guidelines for managing money are different from what they were when you were working.  This discussion will walk through the 3 core steps in developing an income strategy during retirement.

 We will cover:

  1. Pension
  2. Employment earnings
  3. Personal savings and investments

  1. Investment Fundamentals
  2. Modern Portfolio Theory

  1. The 4% Rule 
  2. Endowment Method
  3. Life-Expectancy Method
  4. Three Tiered Strategy

The choices you make when you retire will play a significant role in how you spend your retirement years. Understanding how your strategy works, can lead to a greater sense of confidence and control over your decision making as you transition into a new chapter of your financial life.

For more information call 828-227-7397 or email

Instructors: Joel Kelley, CFP® and Jacob Sadler, CFP®