You’re scrolling your feed and it’s full of market headlines. One moment it’s inflation, the next it’s a sudden market swing or a new “safe haven” asset people are talking about.
The group chat is buzzing and everyone seems to be doing something. It’s easy to start wondering: am I supposed to be in on this, too?
That’s FOMO, or the fear of missing out. It’s a very human reaction. But in investing, it can quietly pull you away from the kind of long-term habits that tend to build wealth over time.
This article looks at what FOMO is, why it shows up in investing and a few practical ways to try to keep it from driving your investment decisions.
What FOMO is in investing
FOMO is the feeling that you might miss a great opportunity if you don’t act quickly. In investing, it often appears after seeing an investment suddenly surge in price. It might also be a chart going viral online or a friend talking about a recent win.
The tricky part is that FOMO doesn’t feel irrational in the moment. It feels like urgency. When you see lots of people moving in the same direction, your brain starts to wonder if they know something you don’t. It’s a bit like lining up for a new restaurant because everyone else is talking about it. You might not even be hungry, but the buzz can make it feel like something you shouldn’t miss.
How social media amplifies investing FOMO
Social media has changed how quickly investing stories spread. A single chart or screenshot can reach thousands of people in minutes.
The problem is that what spreads online is often the most dramatic outcome. Big wins get shared widely, while quieter long-term investing rarely goes viral.
This can create a distorted picture of investing. It may seem like everyone else is constantly finding the next big opportunity, when in reality, many investors are simply sticking to steady strategies over time.
Recognising this dynamic can make it easier to step back before reacting to the latest trend.
Why FOMO hits harder when money is involved
Money decisions carry emotional weight. A missed opportunity can feel personal, even though markets move unpredictably all the time.
When prices are moving quickly, it’s common to feel impatient or worry that you’re falling behind others. In those moments, people sometimes make decisions just to relieve the discomfort, not because the investment fits their long-term plan.
How FOMO can derail a long-term plan
FOMO doesn’t always lead to one dramatic mistake. More often, it shows up in small decisions that slowly pull a portfolio off course.
Buying shares after a big run-up
Many people only notice an investment after it has already surged. By that point, a large part of the early gains may have already happened.
Switching too often
FOMO can lead to constant portfolio tinkering – that is, moving from one idea to the next. That can increase costs and make it harder to stick with a strategy long enough to work.
Selling stable investments to chase something new
Sometimes FOMO shows up not as buying something new, but as selling shares suddenly because another investment suddenly looks more exciting.
It’s best to focus on understanding the investment, the risks involved and how it fits your goals rather than reacting to hype or social pressure. Learn more in our guide to researching what you’re investing in .
Australian hype cycles: a grounded example
Many Australians remember the Afterpay years, when optimism around buy-now-pay-later companies dominated headlines and the company’s rapid growth was hard to ignore. But sentiment around the sector later cooled as interest rates rose and questions about the model became more common.
That doesn’t make Afterpay a “good” or “bad” investment story. It’s simply a reminder that the narrative around an investment can shift quickly, sometimes faster than people expect.
Crypto markets have seen similar waves of excitement. When prices move sharply and stories spread online, it can feel like everyone else has a clear strategy. In reality, many people are just reacting in real time.
Signs FOMO might be influencing your decisions
FOMO can be subtle. A few common signs include:
- Buying an investment shortly after seeing it surge in price
- Jumping into an investment mainly because other people are talking about it
- Changing strategies frequently
- Checking prices constantly after entering a trade
- Feeling regret when you see others making money from an investment you don’t own
- Abandoning a long-term plan because another opportunity suddenly seems more exciting
- Panic selling or panic buying
Noticing these patterns doesn’t mean you’re doing something wrong. It simply gives you a chance to pause and reconnect with your original plan.
A simple circuit-breaker for when FOMO hits
When that “I should buy this right now” feeling appears, a simple pause can help.
Some investors use a personal rule: wait 24 hours or even a week before buying anything discovered through hype.
During that pause, it can help to ask:
- What is this money actually for?
- If the price dropped tomorrow, would I still feel comfortable holding it for years?
The goal isn’t to avoid investing altogether, but to make sure the decision belongs to you rather than the noise around you.
Why long-term investing can feel boring
We get it: long-term investing can feel boring , rarely creating the kind of excitement that drives FOMO.
Diversified portfolios tend to move gradually. Regular investing habits don’t produce dramatic overnight wins. But that steady pace is often the point. Instead of chasing the next big opportunity, long-term investors focus on consistency and time in the market and often adopt a buy and hold strategy.
While it may feel less exciting day to day, this approach can remove much of the emotional pressure that leads to reactive decisions.
Habits that make FOMO quieter over time
FOMO tends to be loudest when there’s no structure. Having a simple plan can make those moments much quieter.
Start with goals, not trends
A home deposit in three years and retirement in 30 years usually call for different approaches. When you know what you’re investing for and roughly when you’ll need the money, it becomes easier to ignore short-term hype.
Diversification reduces pressure
Owning a spread of investments means your strategy doesn’t rely on a single idea working perfectly.
Dollar-cost averaging can remove some timing pressure
Investing a set amount regularly, AKA dollar-cost averaging , means you’re not trying to guess the perfect moment to enter the market.
Automation can make consistency easier
Some investors use tools like Pearler’s Automate feature to keep contributions happening in the background. It doesn’t guarantee outcomes, but it can make long-term investing habits easier to maintain.
Investing psychology, explained simply
Behavioural finance studies how psychology influences financial decisions.
Two common patterns help explain why FOMO can feel so powerful:
- The bandwagon effect is the tendency to follow the crowd because it feels safer than acting alone
- Confirmation bias happens when we focus on information that supports the decision we already want to make while ignoring information that challenges it
Recognising these patterns can make it easier to pause before acting.
Sarah’s (fictional) story: choosing steady over hype investing
Sarah is 29 and saving for a first home deposit in Sydney. She has about $6,000 in savings and recently started her first full-time role, so her super contributions are quietly building in the background.
Earlier this year, she noticed several friends posting about big crypto gains . The temptation wasn’t just the potential returns – it was the feeling that everyone else had started the race without her.
Instead of jumping in immediately, Sarah slowed down and wrote out her goal: building a home deposit. She spent some time reading through investing basics and thinking about what made sense for her timeline.
In the end, she decided to keep most of her short-term savings steady while starting a small investing habit for the long term. She set up a $200 monthly auto-invest into a diversified ETF portfolio.
The biggest change wasn’t the numbers. Once the plan was in place, she stopped checking prices every day and felt more comfortable letting time do the work.
FOMO vs steady investing: the difference in one table
One way to understand the difference is to compare the behaviours side by side.
|
FOMO investing |
Steady investing | |
|
Reason for action |
Hype and social pressure |
Personal goals and strategy |
|
Decision speed |
Rushed |
Considered |
|
Risk style |
Concentrated |
Diversified |
|
Emotional impact |
Stress and regret |
Calmer and more consistent |
|
Behaviour over time |
Frequent switching |
Repeatable habits |
Keeping FOMO in perspective
FOMO doesn’t mean you’re bad at investing. It means you’re human.
The goal isn’t to eliminate emotions completely. Instead, it’s about building a process that keeps them from driving every decision. A plan you can repeat and habits that help you stay consistent even during market volatility.
If you’d like to explore these ideas further, Pearler has plenty of guides on long-term investing, diversification and building consistent investing habits. You can check them out here .
General information disclaimer
This article is for general informational purposes only and does not take into account your objectives, financial situation or needs. Investing involves risk, including the risk of loss. Rules, products and market conditions can change, so consider seeking advice from a licensed professional and checking relevant official sources before making decisions.
