3/15/24 7:00 AM - Lesezeit

FOMO Is Back In Town

Robert Karas

Chief Investment Officer, Partner

Do you feel it too? I certainly do. It’s emanating from the resurgence of cryptocurrencies and the AI stock of the moment that others are flaunting right under our noses. The feeling is FOMO: Fear Of Missing Out. 

But is it really FOMO? Often the triggers are trivial: "My neighbor bought Nvidia shares last year and is now bragging about the gains. I don't even know what NVIDIA is." 

Stop right there! Please don't be a threshold investor® - a term I’ve just coined. It refers to people who only take an interest in the stock market once a certain perception threshold is crossed. These days, though, stocks alone aren’t enough anymore. Because the real fast money is being made in the crypto world – you know, those digital coins like Bitcoin and Ethereum. We could swap out Nvidia for Bitcoin in the opening example. Works just as well.

No one is immune to these feelings. After all, people like to talk about the gains their investments have made in recent weeks and months. Funny how it was mostly radio silence for years before that. And not a peep about any losses they may have incurred. 

The darlings of the Corona era

Remember video conferencing provider Zoom, food delivery company HelloFresh or at-home fitness company Peloton? All high-flyers of 2021. They have since lost over 90% of their value and face a more than uncertain future.

Emotions are important. Even the uncomfortable ones. They serve as a warning sign: pay attention, something significant is happening here. FOMO was justified back in the Stone Age when Mrs. Flintstone told us about a bush bursting with berries. Where exactly was it again and what’s the quickest way to get there?

In modern times, this motivation is questionable. By the time something crosses your attention threshold, much has usually already transpired in the financial markets and the big gains are behind us. Who knows if the bull market will continue its charge? And when it takes another nosedive, then what?

Folly and discipline

Are you already invested in stocks? Then you likely have a long-term goal. It’s okay to feel a twinge of FOMO along the way. I'm not immune to it either. But abandoning a good plan because you're afraid of missing out? Discipline is what protects us from such foolishness. 

In my Gutmann Viewpoint, I often discuss how to weather the bad times. Mea culpa, as I don't focus enough on the perils of the good times.
Please keep in mind: Emotions are valuable and we are happy to address them with you. Because we won't leave you alone to deal with those feelings. Sounds a tad cheesy, I admit. 

But that's how we are – always here for you. 

This is a marketing communication: Investment in financial instruments is subject to market risks. The tax treatment depends on the personal circumstances of the respective client and may be subject to future changes. Bank Gutmann AG expressly points out that this document is intended exclusively for personal use and for information purposes only. It may not be published, reproduced or passed on without the consent of Bank Gutmann AG. The content of this document is not based on the individual needs of individual investors (desired return, tax situation, risk tolerance, etc.), but is of a general nature and is based on the latest knowledge of the persons responsible for its preparation at the time of going to press. This document is neither an offer nor an invitation to make an offer to buy or sell securities. The information required for disclosure pursuant to Section 25 of the Austrian Media Act can be found at the following web address: https://www.gutmann.at/en/about-gutmann.

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