“Invest for the long haul. Don’t get too greedy and don’t get too scared.” – Shelby M.C.
In the investing world, FOMO is a serious problem that, if you have it, can lead to committing serious mistakes. FOMO can lead to poor investment decisions because it causes individuals to make decisions based on fear rather than logic. When you’re afraid of missing out, you’re more likely to take risks that you wouldn’t normally take, and these risks might not pay off. Investing is never an emotional act and if it is, you’re doing it wrong.
Here are 10 ways to avoid FOMO when investing
1. Be cautious. Be skeptical of any investment advice you receive, whether it comes from websites, so-called experts, television, friends and family, or even in casual conversation. Don’t succumb to FOMO and jump into an investment without understanding how it works or the risks. Do your own research, and only invest in projects you have thoroughly investigated.
2. Take a long-term view. For most investors, investing to achieve goals is a long-term pursuit. Slowly building wealth is not what most people talk about, but it is the most secure path to financial security. Resist the temptation to panic at bad news or chase after the latest investment opportunity. Focus on your plan with patience and avoid making decisions based on FOMO.
3. Realise that losing is part of investing. Recognise that missing out on an opportunity now and then is not a bad thing. Actually, it is a normal part of any trader’s experience, especially if you are new. Most traders would rather brag about their success stories than admit their losses, but every investor has experienced financial setbacks.
4. Google FOMO-related cases of people losing everything. Google the cases of major losses instead of focusing on success stories (which happen less frequently than you might think). Participate in an online trading forum and post a question asking other members to share their worst trading experiences.
5. Analyse FOMO-related mistakes. Every trader has a track record of failures that they would rather forget. As with any deep-seated fear, it causes us to act quickly and without thinking. It is important to review your investment portfolio to determine whether FOMO is to blame for you losing (or not earning) a lot of money.
6. Have a plan and stick to it. Having a plan in place can help you avoid the regrettable effects of FOMO. Knowing your goals and how much you are willing to invest can help you make decisions based on logic rather than being influenced by feelings.
7. Don’t invest more than you can afford to lose. This is a general investing rule, but it’s especially important in the volatile world of cryptocurrency. If you cannot withstand the likely total loss of your investment, you cannot afford to take the risk of investing the amount you are considering.
8. Be patient. Be patient with your cryptocurrency investments as the market can be highly unpredictable. The fear of missing out can lead some people to make risky investments. Don’t let FOMO influence your investment decisions; instead, hold off for the right opportunity.
9. Disconnect from the market. Trading can be mentally taxing. Take a mental detox and try stepping aside for a while and engaging your mind with something else to give your mind a break. Remind yourself that life is not limited to making money.
10. Don’t be afraid to miss out. In the world of investing, there will always be new opportunities. If you miss out on one investment, don’t worry – there will be others. Focus on the long-term and don’t let short-term FOMO make you lose sight of your goals.
Finally, FOMO can lead to financial problems if you make impulsive decisions that you can’t afford. If you put your finances at risk in order to make a quick profit, you might find yourself in deeper debt or even worse financial shape than when you started. It can be difficult to resist the urge to buy when everyone around you is bragging about how much money they are making in crypto. Keep in mind that just because something is popular does not mean it is a good investment. Investing is a big decision, so it is important to do your own research to make sure you are making a wise choice.