by Scott Ronalds

Value or growth? Large cap or small cap? Canada or foreign? Active or passive? Yanny or Laurel? Wait, what?

Back to that last one in a minute.

What do all these things have in common? One doesn’t have to be exclusive of the other. A lot of time and energy is spent talking up one or knocking the other. Yet, all of these strategies can have a place in a portfolio, and in fact, can complement one another nicely.

As investors, we hear and interpret things differently. And we can get caught up in one line of thinking. Social media exacerbates this, as algorithms are designed to feed us stories and viewpoints that we’re inclined to agree with.

Tom wrote a piece in the Post the other week about the importance of diversifying your information sources as you would your portfolio. As he notes, “there’s valuable information and insights to be found in the shadows of obscurity.”

To be successful, it’s important to act on our convictions, but we also want to keep an open mind and make sure we’re not just hearing one side of the story.

Back to Yanny or Laurel. If you haven’t heard about this sound illusion that’s been breaking the internet lately, here’s some background. In a nutshell, a computer-generated voice is saying a word that people are interpreting totally differently. Some people hear “Yanny” while others hear “Laurel”. It’s really interesting; give it a try (click the link above).

What’s fascinating is that many people are steadfast in what they’re hearing and can’t believe that others are hearing something totally different. They’re simply not open to the fact that the frequency, bass, pitch or volume that the word is spoken at can impact how people hear it so differently. “I’m right and you’re wrong” is a common response. Play the audio clip to a group of people and you’ll see what I mean.

If you accept that it can be both Yanny and Laurel, you’ve got a more open mind — and your portfolio is probably better diversified than those who think it has to be one over the other.