FOMO is something we’ve talked about in investing for awhile now, especially after more than a decade of bull markets in stocks. FOMO, or the Fear Of Missing Out, is what is motivating investors to continue to buy stocks on the way up- this idea that stock prices could go to the moon and they don’t want to miss out on this upside opportunity. Now that the market has reversed in the last 4-6 weeks and has gone down aggressively 20-30+%, it’s a different type of fear that is motivating people. Instead of the fear of missing out, it’s now the fear of losing everything- the fear of being insolvent and getting crushed by this market.
Yet even during this severe downtrend there will be days where the market is up 5-10% in one day. And this, in my opinion, is FOMO-driven buying. There is this fear of missing the bottom- this fear that the market is going to go all the way back up to the previous highs. Investors are afraid of missing out on this initial move thinking that others are taking advantage. In general, it makes sense to pay attention to the longer-term trends and not get too caught up in using fear as a motivator for any buy and sell decisions.
“In general, it makes sense to pay attention to the longer-term trends and not get too caught up in using fear as a motivator for any buy and sell decisions.”
What’s interesting is that FOMO is prevalent in a lot of other places as well. I discovered it recently in my own day-to-day process. I’ve spent a lot of time over the years trying to improve my processes and routines. I look to find better ways to manage my priorities and my time, and to make sure I’m working in line with my values. And I’ve written quite a lot on MarketMisbehavior.com about different approaches to self-improvement.
But I noticed something this past week, now that I’m working from home pretty extensively here in Western Washington. I use Pocket, which is both an App and a website that allows you to save links to web pages for later. If you see an article you want to read, instead of distracting yourself and spending time on it right then and there, you can hit a button and save it to your “pocket”. Later, when you have time, you can go through and read those stories.
Often what these websites are doing with their “clickbaity” headlines is tapping into that FOMO, or that fear of missing out. They want you to get the sense that you are missing out if you don’t read that article. That’s the whole nature of these eye-catching headlines and images- they use FOMO to draw you into those articles and help support them through their advertisers.
Don’t let FOMO creep into your everyday process.
I think of myself as someone who is well read. I try to read a lot and often, and I try to consume a lot of good information to stay well-rounded and have a good understanding of what’s going on around me. But what I’ve come to realize is what is really motivating me is not the need to be informed and to be aware and to understand. It’s really, more than anything, the fear of missing out that’s motivating me to save those articles to Pocket.
And here’s how I know- I just checked, and my Pocket account has over 400 articles that I’ve saved over the last couple of years. At times I have chipped away and brought it down to maybe 225 articles after some serious devoted reading sessions, but in general, I’m saving way more than I’m reading. And I’ve noticed that in my vast Pocket queue, some of those articles are from a year ago- they aren’t even relevant anymore! And some links, now that I’m looking with a clear head, it’s not even apparent why I saved them in the first place.
And this is the dilemma. It is so easy to fall victim to that fear of missing out. For me, just the act of saving a link to my Pocket is what scratched that itch- that’s what made it all better. Not actually reading that article. Not actually gaining wisdom from that article. Just the simple act of saving that link and having it available to me later was enough. This may be reminiscent of your own Amazon wishlist- things you add but never intend to buy. I have found myself adding a book I want to read to my wishlist, and by doing so, I have effectively relieved myself of the duty of actually reading that book.
Be intentional about what makes your reading list, then schedule time to read!
The fear of missing out can creep in at anytime. No one wants to spend all day saving links to some mystical queue they’re never going to tackle. So to fight that FOMO urge, I’m suggesting two strategies.
First, be intentional about what you’re actually saving for later. What books do you really think are going to help improve you as a person or enrich your life? What articles do you really need to read that are going to materially impact your ability to grow personally and professionally? Instead of just flagging them for later, what things could you put on your Amazon wishlist that you really do intend to buy? It’s OK to just let all the other stuff go. And if you do this at the start, if you make sure you’re filtering out all the noise and are only capturing the good stuff, you’ll have a much smaller, much more manageable list of really meaningful things to go through when you have time.
Second, be intentional and thoughtful about when you are actually going to approach these items. Set a time. For me, I actually schedule time on my calendar every Friday to go through my Pocket queue. I also try to schedule time to read books, but as with most things, I feel I could do a better job of finding times both in the mornings and the evenings to read. You can always refine and improve your processes!
If you are intentional about what you save for later and purposeful about the time devoted to those items, you will filter out the noise and be left with only what is meaningful. You’ll then have time to go through what really matters and take action. If you do this, you’ll find you are enriching your life personally and professionally.
RR#6,
Dave
Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. Please see the Disclaimer page for full details.