What does March Madness Have to Do with Your Financial Decision-Making?

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What does March Madness Have to Do with Your Financial Decision-Making?

How people make predictions, assumptions and decisions is a fascinating thing to study. In particular, how people make financial predictions, assumptions and decisions is even more fascinating and I want to share some observations along those lines with you in today’s episode. In order to do that, I want to take a little detour and talk about decision making for something that doesn’t have high stakes – March Madness brackets. How do you make decisions on your bracket picks? Do you make your picks based more on data, more on your gut, or a combination of both? When I say “data” this would mean you take a look at a teams’ seed, their record, and their other stats (which is really never ending if you want to go down that rabbit hole). When I say “gut” I mean that you just have a feeling that High Point is going to upset Wisconsin, or that Iowa is going to upset Florida. If you are a fan of one of the teams, your gut might even lead you toward a more favorable bent than the teams you are unfamiliar with. Most of you probably do a blend of both. You look at some of the stats, the seeding at least. But then you probably just pick some upsets from your gut, because picking upsets is a lot of fun. I wanted to do an experiment this year. I wanted to compare predicting the future with a data only approach vs. a gut approach informed by data. So, I did two separate brackets and am letting them compete against one another. They are not terribly different. In my gut bracket, I was a little bolder in predicting upsets. I got some right. I got some wrong. To make this experiment even more fun, someone in our office suggested we let Chat GPT generate its own bracket to see how it would do. So how is this three-way contest progressing? As we enter the sweet 16, my data bracket is just a smidge ahead of my gut bracket, which is tied with the Chat GPT bracket. Now here is my assumption going into this – I think the data bracket will win. Why do I say that? Because when it comes to basketball games, I think that my gut is too biased to be relied upon consistently for decision making. Chat GPT is probably going to beat both of my brackets, because it has access to much more data than I do. Now the prompt that we gave Chat GPT (because it needed a good bit of direction) was to blend data driven with some upset guesses. We weren’t the only ones who did this experiment. The Wall Street Journal is conducting a contest pitting Chat GPT, Gemini, and Claude against each other.

Now, what does this have to do with financial predictions and assumptions? I think it has a lot to do with them. Here’s my main point for today’s episode. We have to start with data in our decision making.

Data is objective. How we interpret that data is subjective. If we had to fill out a March Madness bracket with no seeds, no records, and no stats, I’ll bet we wouldn’t do near as well. The data doesn’t predict the future, but it does give us a more accurate view of the past and the present. That equips us to make higher probability decisions. When it comes to our financial decision making, the best “data” we have may not be what you think. It is prices. In a market that is competitive, prices are our best real-time data. They are better than any statistician, better than any online research tool, better than any bureau that compiles data, better than AI. Prices weigh all the information known at any given moment. We saw this over the weekend with the price of oil. On Friday, oil futures closed at 5:30 PM at roughly $98 per barrel for West Texas Intermediate crude. It opened up on Sunday near the same price and started drifting up to over $100. Then at 6am Central time, it dove down to $88. Why? Because it was factoring in new information. Now, we can speculate on what that information was, but prices will generally reflect all the information at any given time. I say generally because there are exceptions. There are times when prices are out of sync with reality. But I believe those to be exceptions and don’t want to get into what I think causes those exceptions in this episode.

So…let’s make this really practical. Let’s say that you are thinking about buying a house. You currently have a 3% mortgage rate, and you have contacted your bank and understand that you would qualify for a 6% mortgage today. You might think to yourself “interest rates are so high right now. Surely they are going to do down. I think I’ll wait.” But the truth is that rates have just as high a probability of going up as they do of going down. As a matter of fact, when 2026 began, the market priced in that the Fed would lower rates at least twice this year. A lot has changed since January 1st, and today, there is actually a greater chance of the Fed increasing rates rather than decreasing. So…my point is that it is better to make your financial decision based on what you know rather than what you don’t know. Your gut will often influence you to assume an outcome that is the one you are secretly rooting for. Back to March Madness Brackets for a moment…if you are a Tennessee Vols fan like me, overall, these fans are likely to have Tennessee going farther in the bracket than not Tennessee fans. I know this isn’t everyone, but we tend to have what is called a “home team bias.” We expect outcomes that we are familiar with or that we stand to benefit from. Small business owners are notorious for solving cash flow issues by assuming that revenue is bound to go up in the future. “This will be a better year”, or “this will be a better quarter,” are phrases we hear often. And you know what, maybe they really will be? We must wrestle with the present reality. Even if we don’t like it. So, making decisions based on numbers you are certain of (like reducing your expenses) I think gives you a higher probability of success.

So, back to the mortgage decision, instead of guessing what rates will do, take the truth that prices are telling us today and ask the question: “Can I afford a 6% mortgage?” If the answer is “no” then there is nothing else to consider. If it is “yes” I would encourage you not to wait just in case 5% rates come back our way. You could also see mortgages go back up to 7%. Now…I’m not advocating you let data only drive your decisions and that your gut has no role in financial decision making. I actually think that a wise gut, informed greatly by data is a great strategy for decision making. What I’m warning you against is a gut decision that either flies in the face of data, or that just ignores that data. Since we cannot predict the future, all we can do is what we do in our March Madness brackets, play the odds. I think that financial decisions that start with data and end with your gut informed by that data have a higher probability for success. Not perfect, but more probable. And the lower the probability, the less you should stake financially on your decision. And by the way, as much as I love the Tennessee Vols, I’ve got Duke winning the whole thing, as painful as that is to say.

At Foundation Bank and MBC, we help people who are in the market for a home loan, have as much data as we can give them to make a good financial decision. We don’t want to force a mortgage down your throat. We want to understand what you value and give you helpful information so you can make a good financial decision. We build creative financial partnerships. Why don’t you start yours with us today by visiting foundationbank.org. We hope you’ll subscribe to this podcast to it in your favorite podcast app and share it on social media. Until our next episode, God bless you.

-President Chad P. Wilson, CFP

Today’s episode of “Money Matters” was written and recorded by President Chad P. Wilson of Foundation Bank/McKenzie Banking Company on March 24, 2026. This episode does not constitute financial advice. Please consult a financial professional to discuss your specific needs. Any rates mentioned are subject to change and are accurate as of the recording date. Foundation Bank/MBC is an Equal Housing Lender, Member FDIC.