If you think spending hours reading stock message boards is making you a better investor, it probably isn’t.

A field study out of South Korea (“Confirmation Bias, Overconfidence, and Investment Performance: Evidence from Stock Message Boards” by JaeHong Park, Prabhudev Konana, Bin Gu, Alok Kumar and Rajagopal Raghunathan) tracked 500 retail investors as they interacted with stock message boards. The researchers didn’t just ask what people thought they were doing. They actually measured how reading those posts changed their behavior.

The punchline is brutal but predictable: investors went looking for confirmation of what they already believed. When they found it, they became more overconfident, traded more, and ended up with worse returns. The more they “researched,” the worse they did.

Call it the 21st-century version of Mark Twain’s line: “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

The mechanics were straightforward. Participants logged into stock boards on Naver.com (South Korea’s version of Yahoo! Finance, but bigger). They were given a curated set of five new posts—some bullish, some bearish, some neutral—and asked which ones seemed credible. Investors who already liked a stock tended to believe bullish posts were better sourced, more popular, and more convincing. Investors who disliked a stock trusted the bearish posts. It was basically a cognitive Rorschach test.

Confirmation bias wasn’t a sideshow. It was the main event. The stronger the investor’s prior belief, the more aggressively they sought out confirming information and dismissed anything that challenged their view.

This would be bad enough if it stopped there. It didn’t.

Reading bullish messages made people feel smarter. It gave them the illusion that they had more control, more information, and more skill than they actually did. That, in turn, led to tighter confidence intervals around their predictions (classic miscalibration) and a spike in perceived competence.

The end result: these investors traded more, even though their predictive accuracy didn’t improve. In fact, their realized returns got worse.

If you ever needed hard evidence that “doing more research” can backfire when it isn’t actually changing your mind, here it is.

A few numbers:

• Investors expected one-month returns of +28.4% on average.
• The actual realized return? –4.9%.
• The more confirmation bias an investor showed, the more trades they made—and the worse their returns.

Worse yet, the effect wasn’t subtle. A one-standard-deviation increase in confirmation bias dropped returns by about half a percentage point over just one month. Compounded out, that’s death by a thousand self-inflicted cuts.

The paper also tackled some secondary questions. Experienced investors weren’t immune. Higher “perceived knowledge” reduced confirmation bias slightly, but not much. More trading experience didn’t necessarily make people less biased. Large portfolio sizes didn’t protect anyone either—in fact, bigger bets made the dissonance from disconfirming information even harder to accept.

In short: having “skin in the game” didn’t fix anything. It just made the need to justify past decisions even stronger.

What’s more interesting is what didn’t happen. Investors who had strong initial opinions but didn’t seek out confirming posts didn’t trade more. They didn’t underperform as badly either. It wasn’t the strength of their belief that killed them—it was refusing to process disconfirming evidence.

This distinction matters. You’re allowed to have convictions. But if you never let new data challenge them, you aren’t investing—you’re gambling under the banner of research.

There’s a larger lesson here.

The easy story is: retail investors are dumb. But that’s lazy thinking. The real story is about human nature. Nobody likes being wrong. Message boards—like curated newsfeeds, personalized recommendations, and echo-chamber social media—let you marinate in your own opinions until they harden into dogma. And once you’re overconfident, the next mistake is inevitable: too many trades, too much risk, too little return.

In this sense, message boards aren’t neutral. They’re bias accelerators. They take the human tendency to confirm existing beliefs and strap a rocket to it.

The market doesn’t care about your feelings. It cares about what’s priced in. And if you’re still trading based on what a stranger posted in a bullish thread about XYZ Biotech, you’re probably already losing—whether you realize it or not.

Bottom line:

More information isn’t always better. Better processing of information is what matters. And unless you’re willing to actively seek out disconfirming evidence and update your views, every hour you spend on stock message boards is making you a worse investor, not a better one.

Disclaimer

This document does not constitute advice or a recommendation or offer to sell or a solicitation to deal in any security or financial product. It is provided for information purposes only and on the understanding that the recipient has sufficient knowledge and experience to be able to understand and make their own evaluation of the proposals and services described herein, any risks associated therewith and any related legal, tax, accounting, or other material considerations. To the extent that the reader has any questions regarding the applicability of any specific issue discussed above to their specific portfolio or situation, prospective investors are encouraged to contact HTAA or consult with the professional advisor of their choosing.

Except where otherwise indicated, the information contained in this article is based on matters as they exist as of the date of preparation of such material and not as of the date of distribution of any future date. Recipients should not rely on this material in making any future investment decision.