FOMO is an acronym for “fear of missing out,” which is a social anxiety stemming from the belief that others might be having fun while the person experiencing the anxiety is not present. Social networking may have broadened the opportunity to feel left out.
FOMO may partly explain the social network driven dramatic increase in volume and volatility of some stocks, think GameStop. It is certainly easy to understand how individuals can feel that somehow they are missing the boat when others are bragging about instant profits through an account at RobinHood. Remember, most people are quick to share their successes, “forgetting” to mention their losses or their failing to cash in on their winnings before their victories turn into defeats.
Readers may also want to reference our February 2021 Sigma Summaries, Investing Is Not Supposed To Be Fun.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA®