FOMO is a dangerous thing, especially in investing. Moreover, it can lead to impulsive decisions that are hard to recover from. I’ve lived it. When I saw charts for Shiba Inu, Dogecoin, and Crypto.com soaring, I didn’t want to miss out. Everyone seemed to be making money, and as a result, I convinced myself that I could, too. However, this emotional reaction was a mistake. I jumped in at the wrong time, fueled by emotion instead of strategy. It didn’t end well. My portfolio took some hits that were completely avoidable—if I had approached things differently.
If you’ve ever felt the panic of missing out or the regret of holding on too long, this article is for you. I’ll share my mistakes, the lessons I learned, and the tools you can use to avoid the same traps.
What is FOMO (And Why It’s So Tempting)?
FOMO (Fear of Missing Out) in investing is like hearing about a party everyone’s at—except the party is a stock or crypto shooting up 300%. You see headlines, hear success stories, and, consequently, feel like the train is leaving without you. Therefore, the pressure to act can feel overwhelming. Hype on social media or in the news amps up this fear, pushing you to act impulsively rather than thoughtfully. Learn more about behavioral finance and FOMO.
My Biggest FOMO Mistakes (And What I Learned)
- Shiba Inu (SHIB): In October 2021, SHIB went on a wild ride, gaining over 800% in just a month. I jumped in, convinced there was still room to grow. By November, the hype fizzled, and I was left holding the bag. Lesson: Chasing an all-time high (ATH) often means you’re too late. Learn about Shiba Inu’s rise and fall in 2021.
- Dogecoin (DOGE): Remember the Elon Musk hype train in May 2021? Everyone was buzzing about his SNL appearance, and I thought it would send DOGE to the moon. Instead, the price dropped 30% right after the show. Lesson: Markets often “buy the rumor and sell the news.” Timing matters. Read about how Dogecoin tumbled after Elon Musk’s SNL appearance.
- Crypto.com (CRO): When CRO hit $1, I thought, “This is just the beginning!” I held on, thinking it would go higher, but instead, it crashed. Watching my profits vanish taught me the importance of taking profits along the way. Read about how CRO surged to $1 before dropping.
- Rite Aid (RAD): I bought into the hype of a potential buyout without doing enough homework. The stock tanked, and I felt stuck—hoping it would recover, but it never did. Lesson: Hope is not a strategy. Research and exit plans are. Learn about Walgreens’ attempt to acquire Rite Aid.
The Emotional Rollercoaster of FOMO
FOMO-driven decisions often lead to:
- Buying High: When the asset is already overvalued,
- Holding Too Long: Waiting for a rebound that may never come,
- Missed Opportunities: Because your portfolio is tied up in speculative plays.
I’ve learned that emotional decisions don’t build wealth; instead, they often lead to losses. As a result, adopting a clear strategy is essential for success.
5 Ways to Beat FOMO and Invest Smarter
- Build a Strong Core Portfolio:
Focus the majority of your investments on stable, diversified options like ETFs or blue-chip stocks. Think of these as the backbone of your portfolio—assets designed to grow steadily over time, weathering market volatility. Read this guide to building a solid portfolio. - Limit Speculative Investments:
It’s okay to take calculated risks, but set clear boundaries. Allocate only 5-10% of your portfolio to high-risk, high-reward plays like meme stocks or cryptocurrencies. This way, you can satisfy your curiosity without jeopardizing your financial stability. - Take Profits Strategically:
Don’t wait for the “perfect” peak—it rarely happens. Instead, use a tiered approach: sell part of your position after significant gains while letting the rest ride. This ensures you lock in profits and reduce the risk of watching your gains disappear. Learn about profit-taking strategies. - Stick to Long-Term Goals:
Remind yourself why you’re investing in the first place. Whether it’s retirement, a dream home, or financial independence, keeping your eyes on the bigger picture helps you resist short-term temptations. A well-diversified, goal-aligned strategy always beats a knee-jerk reaction to hype. - Learn From Mistakes:
Every mistake has value. Reflect on what went wrong with past investments—whether it was chasing hype, not doing enough research, or holding on too long. Write down these lessons and revisit them before making new investment decisions. Growth comes from reflection. Learn from investing mistakes with this guide.
The Turning Point
These lessons helped me regain control of my portfolio. Consequently, I stopped chasing hype, built a balanced strategy, and accepted that it’s okay to miss out sometimes. The market isn’t going anywhere—there’s always another opportunity.
Closing Thoughts
FOMO is natural, but it doesn’t have to control your decisions. When you let hype dictate your actions, you’re gambling, not investing. By sticking to a plan, diversifying, and knowing when to take profits, you’ll stay ahead in the long run.
Have you ever fallen for FOMO? Share your experience in the comments. Let’s learn from each other and keep growing as smarter, more disciplined investors.
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