Anybody ever make a bad decision rooted in fear? I bet the families that paid kickbacks to illicitly get their kids into Ivy League schools might now believe they did. Or maybe the teenager that went along with the crowd to fit in -- at the expense of their own values or safety. Or maybe a few of the ‘get rich quick’ investors might be rethinking their decisions. They were all afraid of missing out on ______. This is such a common catalyst that it has garnered its own acronym – “FOMO” – Fear of Missing Out. It’s not new, it’s not going away, and none of us are immune.
In many cases, our reactions to FOMO are emotional, not well thought out or researched, and often impulsive. A quick look at Reddit and meme stocks, or the digital transaction (currency) technologies confirm this. With returns of 4000% in a few months, heck, I’m even tempted and I know better! This “keeping up with the Joneses” mentality has found its way into most peoples lives.
On the other end of the spectrum, we also readily entertain pundits that predict apocalypse in a variety of forms. They are selling fear that something horrible is about to happen and that “this time is different.” With respect to investing and wealth management, “the bottom is about to fall out” has been predicted ever since investing began.
The irony of these two extremes is comical. Some of the most FOMO driven, speculative investments are just one tweet away from their own apocalypse!
To be fair, there is a place to take an offensive position and take a chance on investing in the “great new thing.” Likewise, there is a place to take a defensive position by limiting these somewhat-gambles to small percentages of a diversified, balanced-for-you portfolio(s). And there’s the key - investing that you can count on is boring. It’s not gambling. It’s not emotional. It’s not impulsive. It is systematic, disciplined and understood.
We are looking forward to soon authoring commentary on the evolving digital currency/transaction technologies and their role in wealth management. We are all learning about this space – even the developers.
Until then, we encourage you not to be too enticed by the stock-that-just-can’t-fail or the doomsday pundits. We have been fortunate to have a very long climb up-and-to-the right. There will always be jags in the trend-line. Don’t fear being boring – it pays off. And, of course, reach out to us with questions along the way.