FOMO seems to be a pretty popular word on Wall Street lately. For those of you still catching up, according to the Urban Dictionary, FOMO is a state of mental or emotional strain caused by the Fear of Missing Out.
Even in the face of a deadly virus, there is light at the end of the tunnel. We have recently been seeing more optimism than we have in the last 6 months. So maybe we shouldn’t be afraid of change. Rather we should look at ways to take advantage of it.
The best way to avoid FOMO is to understand that it is going to occur no matter what you do. The stock market has a knack for acting at times in a way that makes us question our choices. That is how investing often works. We may never feel absolutely certain of our decisions because the market is always going to act in unpredictable ways.
Instead of focusing on what we might be missing, maybe we should be focusing on what we are doing. Should I abandon my process and buy this stock right now because the market is going straight up and I'm sitting on too much cash? Is this an investment I would normally make or am I acting because I fear missing out on exorbitant returns?
On the other extreme, many investors are paralyzed by a Fear of Moving On. A fear of moving on six months ago is what caused many investors to miss out on a huge rise in the stock market.
After more than 30 years in this arena, I have learned to play the game in front of us, no matter what the challenges.
What happens if the country pivots politically after the November election? Regardless of the outcome – there is nothing we can’t overcome. 250 years of history is not going to come tumbling down overnight. Think about professional sports in this strange new world we are in. They don’t have any fans in the stands, but they continue to play the games. And as a viewer, it’s been better than good – how about them Steelers! What else can they do. Life must keep moving on.
During a storm a few weeks ago, a microburst caused a huge branch to fall from our neighbor’s tree, wiping out sixteen mature arborvitae trees in our yard. They have been there for 30 years. We have never lived in our house without them being there, providing privacy and a border for our property. Now we had to replace them with smaller, younger trees. But as it turns out, we are enjoying the new versions even better. They provide a new view we have never seen before and we look forward to watching them grow.
Don’t worry about what the future view may look like. Commit to being resilient and to having confidence in your plan and your advisor. I once heard someone say, “Be a master of your own thoughts, not a slave of your emotions.” That is a great description of what investing is like in 2020.
Granted, the market has faced a slew of headwinds recently from continuing coronavirus fears to stimulus uncertainty. Even the stock market monsters of 2020 - big tech stocks, have pulled back from their earlier highs. But remember where we were six months ago as we faced incredible uncertainty. All that happened next was one of the most rapid stock market recoveries in history.
Don’t get paralyzed looking at the big picture. Whichever FOMO you may be looking to conquer, start with removing fear from your investing and planning strategy.
Thanks for reading.
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