On FOMO and Timing
Why your strongest urge to buy is usually the signal to be cautious.
On FOMO and Timing
Key Takeaways
- Your strongest urge to buy is almost always the most reliable signal to be cautious. FOMO peaks exactly when prices are highest
- Search data confirms people look up “buy stocks” and “cryptocurrency” when prices are already high, not when they’re cheap
- A simple diversified portfolio beats 90% of active investors over time. You don’t need excitement, you need a plan and the discipline to stick to it
How Trends Destroy Returns
FOMO destroys investor returns over and over. It’s not bad stock picks or wrong timing. It’s the feeling of missing out. And the cruel part is that FOMO feels like opportunity right up until it costs you money.
Think about how a trend develops. A small group of early investors buys something cheap. They make great returns. Other people notice. The story gets exciting. Media picks it up. Now everyone notices. Prices rise. Finally, when it’s impossible to ignore, when your dentist is talking about it at your checkup, everyone jumps in at once.
That’s the peak. And that’s exactly when your FOMO impulse is screaming at you to buy.
The data confirms this. People search for “buy stocks” and “cryptocurrency” when prices are already high, not when they’re cheap. They pile in at peaks, not at the beginning. Bitcoin hit nearly $69,000 with FOMO at fever pitch. A couple months later it was down 40%. By year’s end, down 65% from the peak. People who bought at the peak and got scared lost money they probably needed.
Why Your Brain Betrays You
Your brain is doing what evolution wired it to do.
Scarcity bias makes you jump when something feels limited. Social proof convinces you that if everyone else is buying, it must be safe. Recency bias makes you assume what just happened will keep happening. And underneath it all, loss aversion: you feel the pain of losses roughly twice as strongly as the pleasure of gains. You’d rather buy something that might lose money than miss something that might go up.
That fear is stronger than greed.
Goal-Based Investing as the Antidote
The solution isn’t willpower. It’s structure.
Be clear about your actual goal. Not “get rich.” A real goal: retire at 55, save for your kid’s college, build a down payment fund, have enough passive income to go part-time. Something specific and personal.
When you’re goal-based investing instead of trend-chasing, everything changes. You calculate what you need to earn to hit your target. Then you invest in a portfolio designed to hit that number and you don’t watch every trend. You don’t need to know about the hot AI stock because you don’t need 15% annual returns. You need 7%, and you’re going to get that reliably. You don’t care if crypto goes up or down because crypto isn’t in your plan. The noise doesn’t matter because you’re not listening for signal in the noise.
Practical Defenses Against FOMO
Write your plan before the urge hits. Document why you’re investing, what you’re investing in, your timeline, and what circumstances would actually cause you to change your plan. When FOMO hits, your past self thinking clearly is smarter than your present self thinking in panic. Read that plan. Let it work.
Use a 24-hour rule. When an investment suddenly feels urgent, commit to waiting a full day. By tomorrow, your FOMO impulse will have either faded or you’ll have found rational reasons to proceed. If the opportunity is real, it’ll still exist tomorrow.
Let dollar-cost averaging defend you. Invest a fixed amount on a fixed schedule. Every month, automatically invest your planned amount. When prices are up and FOMO is screaming, you buy fewer shares. When prices are down and everyone’s panicking, you buy more shares. You naturally buy more low and less high through mechanical discipline. Your emotions never get a vote.
Ask the clarifying question. “Would I buy this if no one was talking about it?” If your honest answer is no, you’ve found your FOMO signal. Don’t buy it.
The Long View
Every six months, a new trend emerges. You feel the pull. You ignore it. After a year, you look back at urgent trends and see they didn’t matter. After five years, boring compounding works. You’re ahead of most people, not because you’re smarter, but because you didn’t interfere.
A simple diversified portfolio beats 90% of active investors over time. You don’t need excitement. You need a plan and the discipline to stick to it.
That’s not as thrilling as stories about someone who tripled their money on one hot pick. But the investors who end up with more money aren’t the ones who chased the hottest trends. They’re the ones who had a boring plan and stuck to it.
Gallio tracks your progress toward your actual goals, not the hot trends everyone’s talking about. When you know you’re on track, FOMO loses its power.
On FOMO and Timing
Key Takeaways
- Your strongest urge to buy is almost always the most reliable signal to be cautious. FOMO peaks exactly when prices are highest
- Search data confirms people look up “buy stocks” and “cryptocurrency” when prices are already high, not when they’re cheap
- A simple diversified portfolio beats 90% of active investors over time. You don’t need excitement, you need a plan and the discipline to stick to it
How Trends Destroy Returns
FOMO destroys investor returns over and over. It’s not bad stock picks or wrong timing. It’s the feeling of missing out. And the cruel part is that FOMO feels like opportunity right up until it costs you money.
Think about how a trend develops. A small group of early investors buys something cheap. They make great returns. Other people notice. The story gets exciting. Media picks it up. Now everyone notices. Prices rise. Finally, when it’s impossible to ignore, when your dentist is talking about it at your checkup, everyone jumps in at once.
That’s the peak. And that’s exactly when your FOMO impulse is screaming at you to buy.
The data confirms this. People search for “buy stocks” and “cryptocurrency” when prices are already high, not when they’re cheap. They pile in at peaks, not at the beginning. Bitcoin hit nearly $69,000 with FOMO at fever pitch. A couple months later it was down 40%. By year’s end, down 65% from the peak. People who bought at the peak and got scared lost money they probably needed.
Why Your Brain Betrays You
Your brain is doing what evolution wired it to do.
Scarcity bias makes you jump when something feels limited. Social proof convinces you that if everyone else is buying, it must be safe. Recency bias makes you assume what just happened will keep happening. And underneath it all, loss aversion: you feel the pain of losses roughly twice as strongly as the pleasure of gains. You’d rather buy something that might lose money than miss something that might go up.
That fear is stronger than greed.
Goal-Based Investing as the Antidote
The solution isn’t willpower. It’s structure.
Be clear about your actual goal. Not “get rich.” A real goal: retire at 55, save for your kid’s college, build a down payment fund, have enough passive income to go part-time. Something specific and personal.
When you’re goal-based investing instead of trend-chasing, everything changes. You calculate what you need to earn to hit your target. Then you invest in a portfolio designed to hit that number and you don’t watch every trend. You don’t need to know about the hot AI stock because you don’t need 15% annual returns. You need 7%, and you’re going to get that reliably. You don’t care if crypto goes up or down because crypto isn’t in your plan. The noise doesn’t matter because you’re not listening for signal in the noise.
Practical Defenses Against FOMO
Write your plan before the urge hits. Document why you’re investing, what you’re investing in, your timeline, and what circumstances would actually cause you to change your plan. When FOMO hits, your past self thinking clearly is smarter than your present self thinking in panic. Read that plan. Let it work.
Use a 24-hour rule. When an investment suddenly feels urgent, commit to waiting a full day. By tomorrow, your FOMO impulse will have either faded or you’ll have found rational reasons to proceed. If the opportunity is real, it’ll still exist tomorrow.
Let dollar-cost averaging defend you. Invest a fixed amount on a fixed schedule. Every month, automatically invest your planned amount. When prices are up and FOMO is screaming, you buy fewer shares. When prices are down and everyone’s panicking, you buy more shares. You naturally buy more low and less high through mechanical discipline. Your emotions never get a vote.
Ask the clarifying question. “Would I buy this if no one was talking about it?” If your honest answer is no, you’ve found your FOMO signal. Don’t buy it.
The Long View
Every six months, a new trend emerges. You feel the pull. You ignore it. After a year, you look back at urgent trends and see they didn’t matter. After five years, boring compounding works. You’re ahead of most people, not because you’re smarter, but because you didn’t interfere.
A simple diversified portfolio beats 90% of active investors over time. You don’t need excitement. You need a plan and the discipline to stick to it.
That’s not as thrilling as stories about someone who tripled their money on one hot pick. But the investors who end up with more money aren’t the ones who chased the hottest trends. They’re the ones who had a boring plan and stuck to it.
Gallio tracks your progress toward your actual goals, not the hot trends everyone’s talking about. When you know you’re on track, FOMO loses its power.