What is FOMO in investing, and how do I avoid it?
Fear of missing out: buying something because it is rising and everyone is talking about it. It is the emotion behind most bubbles. The antidote is a fixed plan and a small "fun money" allowance so the rest stays untouched.
FOMO is the pull you feel when a stock, a sector or a whole asset class is soaring and it seems like everyone but you is getting rich. It makes you buy things you do not understand at prices you would never have paid a month earlier, because not owning it has started to feel like losing. It is the fuel behind every bubble from tulips to meme stocks.
It is dangerous because it is precisely wrong about timing. The moment something is on everyone’s lips is the moment expectations are highest and the most buyers are already in. Late buyers provide the exit for early ones. That is not a law, but it is the pattern often enough to be expensive.
The most effective defence is a plan that does not have room for it: a fixed monthly amount into a fixed set of funds, decided in calm conditions and not revisited when the market is exciting. When your money is already committed, FOMO has nowhere to go.
The second defence is a pressure valve. Set aside a small, fixed slice, 5 percent of the portfolio or less, that you are allowed to spend on whatever is exciting. If it goes to zero, nothing important changes. If it goes well, you scratched the itch without betting the house.
Informational only, not financial advice. Updated September 4, 2026.
Get the free market brief
Top stories and analysis, summarized. No spam, unsubscribe anytime.