This summer, will you rather wear a straw hat or rain hat?
The approach of July and August offers good prospects for summer holidays. But to deserve these few weeks of escape, we had to go through a time of reflection and then more or less laborious preparation. All these choices will determine the success of this long-awaited period of the year. The choices to be made in front of many and varied possibilities also enlighten us on our financial decision-making!
How to make sure you go on vacation at the wrong time and place…
In the depths of winter, we’ve probably all dreamed at least once before ads highlighting the beauty of the beaches, in front of the images of a superb hotel of charm or listening to the story of a relative back after a magnificent holiday in a sunny country… while we were in the rain. At the end of a dense year, there is no time to waste to study the almost endless possibilities of summer holidays: sea or mountain? domestic or international holidays? idleness or adventure? …
What could be simpler than choosing the destination we have heard about recently, which seems to combine pretty beaches, nice weather and a beautiful hotel? In a few clicks, everything is reserved! Let’s stay in fiction and imagine you putting your suitcases down after a few hours of tiring travel. The disappointment at the arrival may be proportional to the time savings achieved by the lack of more specific research on this dream destination. Installed in your room, you discover it’s the rainy season – or, even worse, the typhoon season – so rain and wind punctuate your days… Days which start from dawn thanks to noisy jackhammers, used extensively in the renovation of the hotel’s main building…
How did you get here? Many cognitive biases hinder the collection and processing of information. First, too much information – known as cognitive overload – leads us to prioritize information and classify it according to less objective criteria (“my table mate who travels a lot seems to know more about it than my travel agency”). Information processing can also lead us to ignore or even reject certain information in contradiction with our opinions, preconceived ideas or beliefs: «maybe it’s usually the rainy season but I think it’s different every year», “the hotel had announced a renovation period but I would be surprised if they did it in the middle of August”).
The existence of these errors sheds light on the difficulty of personal financial decision-making, as it is necessary not to choose the first solution that “does the trick” in order to save effort, nor to try to reject or rationalize the contrary facts (“I had invested in this company for a key contract that it has just lost, but that’s okay because it was certainly not profitable”). So you need to be careful to incorporate elements that are potentially contrary to your beliefs and especially to take into account the context and arguments that might be contrary to what you are considering.
… or get help to miss your vacation choices!
Let’s come back to this rainy holiday spent in a hotel under renovation: are you the only one responsible (in addition to the hotelier and Fortune)?
Let’s first blame your table mate from last month who delivered you the obvious and quick solution to your search for vacation location! Availability heuristics leads us to take decisions on information that is readily available and often up-to-date! By boasting the merits of what was to become your resort, precisely at the time you were searching for a destination, this person has led you to limit your research and your reasoning!
Let’s then blame the dream visuals (posters, websites, photos of tourists) of repeated advertising, that probably led you to remember beautiful images … without relating them to the winter period!
Finally, you may have been the victim of one or the other of the social biases that are frequently found on financial markets, particularly during bubble or crash phases:
- The tendency to follow events or opinions without critical thinking (“the hotel website reviews are excellent”);
- The mimicry that sums up the act of deliberately or unconsciously imitating models to which we seek to identify (“I will do like my table mate who always spends a dream vacation”);
- Conformism that marks submission to the standards of a group that has been embraced (“people who look like me all leave far from home”)
“Hats off” if you haven’t fallen into all these traps… All I have to do is to wish yourself a great summer holiday!
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