FOMO in Investing: The Silent Killer of Long-Term Wealth
- The Value Investor
- Aug 6
- 2 min read
“Fear of missing out is the enemy of rational decision-making.”
Every day, on my Twitter feed I am bombarded with headlines like:
“$HIMS is a generational wealth vehicle – mark my words!”
“$OSCR will make you rich, it’s breaking out buy now”
“Why everyone’s buying AI stocks right now…”
In this environment, it’s not logic that moves money, it’s FOMO.
The Fear of Missing Out leads even smart investors to abandon strategy for emotion, often at the exact wrong moment. But how much does it really cost?
The DALBAR Report: Proof FOMO Hurts Investors
Every year, DALBAR publishes a study on investor behaviour and the results are remarkably consistent.
Over the past 30 years, the average equity fund investor earned only ~6% annually, while the S&P 500 returned over 10%.
Why the gap?
Market timing. Panic selling. Performance chasing. In other words, FOMO and fear, not fundamentals.
What FOMO Looks Like in Your Portfolio
Buying a stock because it’s trending
Jumping into funds after strong runs, just before a correction
Selling during volatility only to re-enter after the rebound
Comparing your returns to others and changing strategy midstream
It’s a behaviour problem, not a knowledge problem.
How to Immunize Against FOMO
1. Anchor to Intrinsic Value
Study the business, not the stock. When you buy based on free cash flow, moats, and margin of safety, not hype, you’ll sleep better through market noise.
2. Think in Decades, Not Days
Buffett didn’t build Berkshire by chasing charts. He stayed invested in quality, letting time do the heavy lifting. FOMO is powerless against a 20-year horizon.
3. Use a Decision Journal
Write down why you’re buying something, the thesis, the valuation, the risks. Revisit this when tempted to react to headlines. It builds discipline.
FOMO vs. Focus
Behaviour | Outcome |
FOMO-driven chasing | Lower returns, emotional stress |
Value-driven investing | Compounding, consistency |
Before you hit "buy" on a stock, pause and ask yourself three key questions:
Am I buying this because it’s trending, or because I’ve done my research?
Do I have a clear, fundamental thesis for this investment?
Would I still hold it if the stock dropped 50% due to market noise, not business deterioration?
If your answers are No, Yes, and Yes, you're not reacting to FOMO, you're investing with conviction.That’s the mindset that builds lasting wealth.
