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The Barnum effect is the name given to a type of subjective validation in which a person finds personal meaning in statements that could apply to many people.
You have a need for other people to like and admire you, and yet you tend to be critical of yourself. While you have some personality weaknesses you are generally able to compensate for them. You have considerable unused capacity that you have not turned to your advantage. At times you have serious doubts whether you have made the right decision or done the right thing.
If these statements sound like they came from a newsstand astrology book, that may be because they did. Such statements are sometimes called Barnum statements and they are an effective element in the repertoire of anyone doing readings: astrologers, palm readers, psychics, rumpologists and so on.
If the statements appear on a personality inventory that one believes has been especially prepared for you alone, one often validates the accuracy of such statements and thereby gives validity to the instrument used to arrive at them. If Barnum statements are validated when they have originated during a psychic reading, the validation is taken as also validating the psychic powers of the medium.
"Barnum effect" is an expression that seems to have originated with psychologist Paul Meehl, in deference to circus man P. T. Barnum's reputation as a master psychological manipulator who is said to have claimed "we have something for everybody." (Barnum did not originate the expression "There's a sucker born every minute," though it has often been attributed to him. David Hannum, leader of a syndicate that had purchased the Cardiff giant, was quoted as saying "There's a sucker born every minute" when he heard of Barnum's plan to display a fake of the fake giant.*)
When it comes to personality tests, a dose of skepticism is a good thing by Susan Krauss Whitbourne, Ph.D. "One reason that people fall for the Barnum effect is that the feedback given in the typical experiment is so generally worded that there's practically nothing to disagree with. The statements are phrased in terms of two diametrically opposed possibilities: "you can be both X and Y" (or sometimes, X "but" Y). Almost anyone can be anything under the right circumstances especially when the X's and Y's are vague enough as to capture any human quality. "You can be smart but at other times you can be dumb." That's true of every human on the planet; even Einstein would have agreed with this self-assessment."