20 Mar What 40 Million Planes Teach Us About Our Fears and Instincts
In 2016, a total of 40 million commercial passenger flights landed safely at their destination. Ten, tragically ended in fatal accidents. However, of course, this 0.000025% were the ones journalists wrote about.
The following year, according to the Aviation Safety Network – an organisation that tracks airline crashes – no deaths of commercial jet passengers occurred. This made 2017 the safest year on record for commercial air travel. But I bet you can’t remember this being a news headline!
Sadly, safe flights are not newsworthy. This begs the question, why do we tend to focus on the negative? Why does the media tend to ignore the positive and over-amplify the negative?
The answer lies in our basic instincts. For obvious evolutionary reasons, fears are hardwired deep into our brains as humans. Fear of danger, physical harm, captivity, and poison once helped our ancestors survive. In modern times, perception of these dangers still triggers our fear instinct.
Indeed, while the world has changed significantly since the first Homo-Sapiens walked this earth some 150,000 years ago, research suggests that our brains haven’t changed much. In 1997 anthropologists discovered the 154,000-year-old skull of a Homo-Sapien in Ethiopia. They found that the brains inside the skull would have been no smaller than the brains of today’s average person.
So, even though the world is a lot safer today, our fear of danger is the same as it’s always been.
And thanks to technology and the 24-hour news cycle, we’re constantly bombarded with much more information than we can consume. Our brains disregard much of this information and instead focuses on only the more dramatic news.
If a piece of information contains danger, our 150,000-year-old Homo-Sapien brain alerts us. We just can’t help it. Journalists understand this and exploit it to their hearts’ content.
The late Swedish professor of international health and co-founder of Médecins sans Frontières Hans Rosling notes that, ‘The media cannot resist tapping into our fear instinct. It is such an easy way to grab our attention. In fact the biggest stories are often those that trigger more than one type of fear. Kidnappings and plane crashes, for example, each combine the fear of harm and the fear of captivity. Earthquake victims trapped under collapsed buildings are both hurt and trapped and get more attention than regular earthquake victims. The drama is so much stronger when multiple fears are triggered. Yet here’s the paradox: the image of a dangerous world has never been broadcast more effectively than it is now, while the world has never been less violent and more safe. Fears that once helped keep our ancestors alive, today help keep journalists employed.’
He notes further that, ‘for the first time in world history, data exists for almost every aspect of global development. And yet, because of our dramatic instincts and the way the media must tap into them to grab our attention, we continue to have an overdramatic worldview. Of all our dramatic instincts, it seems to be the fear instinct that most strongly influences what information gets selected by news producers and presented to us consumers.‘
So, what has this got to do with our personal finances? Well, the financial media is no different to mainstream media and it is primed to exploit our basic instincts and fears. It is littered with stories of impending doom every time the stock markets wobble a bit. We read about billions being wiped off the stock market. Rarely do we hear that billions have been added onto the stock market. These news headlines create a false perception that we are in fact more likely to lose money investing in stock markets than we are to gain. This is not true for long term investors.
And how do we stop the financial media from exploiting our fear instincts?
First, it’s important to recognise that financial news is designed for clicks and eyeballs, not pounds and pennies. Investing based on headlines is a sure way to part someone from their hard-earned money.
Second, it’s often best to avoid making important investment decisions when they’re based on fear. As Rosling observed, ‘critical thinking is always difficult, but it’s almost impossible when we are scared. There’s no room for facts when our minds are occupied by fear.‘