What is FOMO?
FOMO is an acronym not specific to the cryptocurrency community but it has really taken ahold. It means, “Fear Of Missing Out.” It is that feeling you feel when the train is leaving the station and you are not on that train. It is that feeling you feel when your close friends are going to a trendy night club and you’re not. It is getting caught up in the hype cycle of a thing, anything. In the context of crypto, it means missing out on opportunity to buy or sell in order to maximize your value.
Why is FOMO bad?
On an ideological level, FOMO is bad because it is rooted in fear. Unless a 7ft gorilla is stampeding toward you with that look in its eye that it is going to end you, then why would you make decisions from fear? I am no psychologist, but I’ve taken a class or three. When fear sets in, you are left with fight or flight. Those are two very poor options when it comes to financial decisions. FOMO is also bad because it implies you have no control in your decision making. In any market, the current and future performance should be derived from rigorous analysis, not shooting from the hip.
How to avoid FOMO?
Avoiding FOMO is easy. Yes, it is easy. Stick to your investment strategy and have your timelines defined. Short term, intermediate term, and long term should be how you bucket your decisions to stay ahead of your emotions. Emotions are transient, plans are not. You need to give yourself a lighthouse to go to whenever the seas of the market get murky and the winds pull in a deep mist.