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FOMO
(Fear Of Missing Out)
FOMO describes the anxiety-driven impulse to participate in rising markets or trends to avoid regret over potential missed gains. This behavioral finance phenomenon fuels market bubbles, with 60% of millennials admitting to FOMO-driven investments during the 2021 crypto boom.
In financial contexts, FOMO manifests as chasing hyped stocks (like NFT or BTC at peaks), panic buying during rallies, or abandoning investment plans to follow trends. Studies show FOMO traders underperform the market by 3-5% annually due to buying high and selling low. Counterstrategies include automated DCA plans and maintaining an investment journal. The opposite mentality, FUD, can be equally damaging when it prompts premature exits from sound investments during temporary dips.
In financial contexts, FOMO manifests as chasing hyped stocks (like NFT or BTC at peaks), panic buying during rallies, or abandoning investment plans to follow trends. Studies show FOMO traders underperform the market by 3-5% annually due to buying high and selling low. Counterstrategies include automated DCA plans and maintaining an investment journal. The opposite mentality, FUD, can be equally damaging when it prompts premature exits from sound investments during temporary dips.