Investopedia defines confirmation bias as:

“A psychological phenomenon that explains why people tend to seek out information that confirms their existing opinions and overlook or ignore information that refutes their beliefs. Confirmation bias occurs when people filter out potentially useful facts and opinions that don’t coincide with their preconceived notions.”

For example, if we start out with the preconceived notion that Apple is a great stock, we will selectively seek out confirmation (from news, analysis, reports, etc) that prove to us that Apple is a great stock. Even if we read reports of the new iPhone sales being a disaster or any piece of negative news, we will filter and ignore it to confirm our existing bias about Apple. This confirmation bias might cause us to hold on to Apple shares even when the signs are telling us that the company’s performance and share prices are falling. (Please note ......