“That fear of missing out on things makes you miss out on everything.”
~Etty Hillesum
As we are all aware, particular assets can rise very sharply from time-to-time.
Predictably, news stories will create anxiety by focusing on the unusual gains other market participants are making, which can influence investor sentiment quite dramatically.
As more people buy due to the Fear of Missing Out (FOMO), this reaction itself can take over as the main driver for even further gains.
Here are some reasons why FOMO never ends well:
- FOMO leads to impulsive, irrational investing -See chart below
- FOMO competes with well-managed portfolios with suitable risk levels
- FOMO causes undue personal stress and financial concerns
- FOMO buying is rarely profitable as it is frequently followed by panic selling
Our professional investment process allows our clients to invest responsibly so they don’t need to unduly worry about news headlines. The disciplined portfolios we provide can prevent people from experiencing financial regret and the emotional pitfalls of FOMO.
The chart below illustrates the dangers of “Roller Coaster Investing.”
