December 2020 Economic Forecast
Psychologists have a term that explains why bad news seems to fill the media bandwidth and capture our attention. It is called “negativity bias” and it includes our collective hunger to hear and remember bad news. A study done at McGill University in Canada demonstrated this trait exists in people that report they prefer “good news.”
The negativity bias is thought to be present because we are wired to be ever mindful of threats and have a need to react. The need to assess risks and react accordingly is certainly a trait of business leaders. However, managing for the future with this negativity bias and the always present cacophony of media inputs can result in delays, missed opportunities, loss of market share, and/ or loss of profits. Taking emotion and emotional bias out of the analysis yields improved results.
The outlook for 2021 is one of rise. That is what the data is telling us.