A Further Look: Which FOMO are you struggling with? Fear of Missing Out or Fear of Moving On?



By David Root, CFP®


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.


Dave


David Root

Founder and CEO

DBR & CO


David Root is Founder and CEO at DBR & CO, a Pittsburgh-based wealth management firm. If you would like to contact the author, David Root, please e-mail him at d.rootjr@dbroot.com or call 412-227-2800.


This material has been provided for general, informational purposes only, represents only a summary of the topics discussed, and is not suitable for everyone. The information contained herein should not be construed as personalized investment advice or recommendations. Rather, they simply reflect the opinions and views of the author. D. B. Root & Company, LLC. does not provide legal, tax, or accounting advice. Before making decisions with legal, tax, or accounting ramifications, you should consult appropriate professionals for advice that is specific to your situation. There can be no assurance that any particular strategy or investment will prove profitable. This document contains information derived from third party sources. Although we believe these third-party sources to be reliable, we make no representations as to the accuracy or completeness of any information derived from such sources, and take no responsibility therefore. This document contains certain forward-looking statements signaled by words such as "anticipate," "expect", or "believe" that indicate future possibilities. Due to known and unknown risks, other uncertainties and factors, actual results may differ materially from the expectations portrayed in such forward-looking statements. As such, there is no guarantee that the expectations, beliefs, views and opinions expressed in this document will come to pass. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.


All investment strategies have the potential for profit or loss. Asset allocation and diversification do not ensure or guarantee better performance and cannot eliminate the risk of investment losses.


The impact of the outbreak of COVID-19 on the economy is highly uncertain. Valuations and economic data may change more rapidly and significantly than under standard market conditions. COVID-19 has and will continue based on economic forecasts to have a material impact on the US and global economy for an unknown period.


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