The Psychology of Investing: How to Wisely Overcome FOMO

                                       

       

[The Psychology of Investing: How to Wisely Overcome FOMO]

       

The moment we step into the world of investing, we are exposed to a flood of information and rumors. In particular, the feeling that 'everyone is making money except me', known as FOMO (Fear Of Missing Out), is one of the most psychological traps investors must be wary of. FOMO is the anxiety of missing out on a good opportunity or being left behind. This FOMO is deeply rooted in the behavior of impulsively jumping into a rapidly rising asset without sufficient analysis.

   

   

'When It Feels Like Everyone But You Is Making Money' - A Guide to Wisely Overcoming Investment FOMO

   

Why is FOMO Dangerous?

   

FOMO clouds rational judgment in investing. When the market overheats, people's 'crowd psychology' is maximized. Just like feeling the anxiety of not being invited to a party, news that everyone else is profiting makes us impatient. At this time, our ability to think rationally is paralyzed, and all that remains is a vague fear that 'if I don't buy now, I'll miss the opportunity forever'.

   

This mindset often leads to blind investing. For example, people often see posts on social media like "I got rich quick with OO coin" and impulsively buy the coin without properly understanding its value or risks. While they hope for large profits in the short term, they often end up buying at the peak and suffering significant losses. FOMO is the most powerful enemy that destroys a long-term perspective and one's own principles.

                    

---

   

3 Ways to Wisely Overcome Investment FOMO

   

So, how can we break free from this powerful psychological pressure?

   

       
• Establish your own investment principles: It is crucial to set your own clear investment criteria, such as the principle, "When the market goes wild, I pause." Instead of hastily jumping into a surging asset, first check if the investment aligns with your own established criteria and principles. Analysis based on objective data such as the asset's value, financial health, and future growth potential should come first.
       
• Improve your information filtering skills: We live in a flood of information. Instead of reacting to every rumor on investment communities or social media, you must develop the ability to discern reliable information. While you can reference objective data and expert analysis, you must get into the habit of making the final decision based on your own judgment. You should be building your own investment story, not someone else's success story.
       
• Rebalance consistently: If you have already built a portfolio, regular rebalancing is a good way to prevent FOMO. If a specific asset's price has surged, making its proportion in your portfolio excessively large, you can sell some to return to your original asset allocation ratio. This allows you to realize profits and naturally step away from an overheated market.
   

   

---

       

Other Articles You Might Find Useful

   

👉 How to Build a Permanent Portfolio

     

👉 Results of Applying Rebalancing to a Permanent Portfolio

   

       

The content of this blog is for reference in investment decisions only, and all investment decisions should be made based on individual judgment and responsibility. Under no circumstances can the information in this blog be used as legal evidence for investment outcomes.