Fear of Missing Out

By C.R. Manske, CFP®
Research and Fact-Checking by Alexandria Osborne

The Fear Of Missing Out can create a lot of anxiety and euphoria when coupled with the ups and downs of the investment markets. FOMO often is the emotional result of seeing a stock market’s high point before it turns over into a bear market. Because FOMO drives many investors to buy and stay invested when they normally wouldn’t, this behavior is actually an interesting form of decision-making paralysis that is a very natural human emotion and can be seen in various scenarios.



Whenever a phrase like “keeping up with the Joneses,” or “follow the leader,” or even simple jealousy is involved, it’s usually related in some way to FOMO. We see our neighbor’s fancy boat or car and, when we imagine all the fun they are having in it, we have a sense of the possible happiness that we’re missing. However, to satisfy an urge to buy a car or boat, one typically must undergo a lengthy process that is difficult to do on a moment’s whim. This means we don’t often see tangible action due to FOMO in cases like cars and boats. But in cases that involve online trading, many people have the capability to make a stock purchase in just a few seconds over their cell phone or tablet, so FOMO is a very real catalyst for action when it involves the investment markets.


Imagine a stock market that has risen over 100% like in 1999 and 2000 when the NASDAQ index went from the low-2000-range to the high-4000-range. Or more recently, the S&P 500 index increased over 100% following the low point set in the year 2009. Investors see others profiting during that market movement and FOMO clouds their judgment causing them to think that if they don’t “get in now,” they’ll miss out on a profit. In spite of the fact that the 100% gain already occurred and that the profit has already been made, FOMO drives investors to press the button on their online stock trading account and, in a flash, they’ve bought an expensive investment and contributed to the euphoric rise near the top of the market.

If the investor is fortunate enough to see this recent purchase turn profitable, FOMO often destroys any chances of benefiting from the rise in value. When looking online, the investor notes a 10% gain on the investment and finds himself paralyzed because of that dreadful question, “What if it goes higher?”



In moments where FOMO is steering an investor’s choices, guidance from a professional money manager can be of great assistance. Where many investors feel a Financial Advisor is “supposed to make me money,” often the greatest benefit of that professional relationship is the deep communication that surrounds not making wrong turns. When FOMO entices clients to stray from the path they defined during calmer, clearer markets, the temptation is easily dispelled by disciplined, meaningful communication initiated by their trusted professional money manager. Providing that important feedback before an impulse buy and establishing clear guidelines for what belongs in a portfolio and what doesn’t are very valuable offerings that are both difficult to measure and challenging to replicate with a robo-advisor or a discounted trading account. The Fear Of Missing Out doesn’t have to be the same as Missing Out, and having clear buy/sell guidelines can greatly assist with navigating this common investor activity.

christopher-manskeChristopher R. Manske, CFP® is owner and operator of Manske Wealth Management. His firm offers investment advice that focuses on monthly client communication. The firm’s dedication to keeping clients and other advisors informed differentiates the team from the rest of Wall Street. In an industry in which clients feel a lack of regular contact from their advisory team, Manske Wealth Management lives up to its slogan: “Every client, every month.” Learn more at www.manskewealth.com.

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