First of all, what is FOMO? FOMO is fear of missing out, but the question is: fear of missing out on what? Fear of missing out is a term we use when we are afraid that other people will have enriching experiences (like earning a lot of money by investing in a particular project). We thereby feel like we will be excluded from having similar enriching experiences if we do not codependently follow along with the rest of the crowd. We also tend to make the fact that we are ‘missing out’ on those experiences mean something about ourselves. FOMO related to investing can be about to early stage projects, but it can also relate to assets that already have been around for a while.
When we experience FOMO, we are inclined to follow along with the crowd by buying an asset, even though it does not feel 100% right. This inclination is about trying to avoid a certain feeling state associated with not participating. When we run away from something, our bodies put themselves into a fight or flight (or reactive) mode. When we then come across an opportunity onto which we can project the feeling state we want to avoid, our senses get heightened and we perceive danger. We subconsciously start anticipating that powerless feeling state we think we will have when we miss out.
In this frame of reference, you could say that the decision to buy is a strategy to avoid that particular feeling state of powerlessness we feel when we miss out. The motivation to invest then becomes avoidant, instead of affirmative. Yet in a way, missing out on investment opportunities is something that everybody experiences all the time: you cannot be invested in everything in all moments of time. So there is an aspect of trying to fight nature when we buy an asset out of FOMO. You could make the analogy with buying an insurance: we insure ourselves so that we do not have to take the consequences when natural adversity happens. With FOMO, we are taking an insurance against the experience of how we thínk we will feel when we miss out. There is a difference between FOMO as an insurance and a classic insurance though: it is less likely that we make the experience of a storm or a fire out to be some sort of personal failure. It is way harder to not make our own investment decisions personal failures, because our decisions are intrinsically connected with how we think and who we are. This amplifies the fear and makes us more insecure in our own decision process, putting us a risk of listening to others.
If there are an infinite amount of opportunities that we are constantly missing out on, why do we then experience FOMO relative to one asset and not to another? There seems to be an element of comparison thinking at play here. It seems like being afraid to not be invested in an asset only tends to happen when we somehow have an emotionally charged image of the group of people who are invested. We thereby project that image onto the situation at hand. We then unconsciously compare ourselves to the group of people who are -supposedly- going to gain from that investment and we mingle our self-worth into the equation of that comparison. We also tend to have little notice for the fact that there are a million other ways to get the same kind of monetary benefit outside of this particular opportunity. There is some sort of uncontrollable hyperfocus onto this particular asset and the holders of this asset. This hyperfocus may indicate that our sympathetic nervous system is activated and that we are in fight or flight. This is a red flag for doing bad analyses.
Comparison is nothing bad though. We naturally compare ourselves with others who have done better than we have. This is built into our biology and it is a part of evolution. When we are doing worse than our peers, this makes us feel bad. This unpleasant feeling is biologically supposed to make us take action so that we can make improvements to our current situation. After all, if we did not feel bad, we would not really have an incentive to change. This feeling state of -let’s call it inadequacy- is useful as long as it is actually possible to make that change, but in today’s world this does not always seem to be the case.
We are more than just our biology. Even though we can do research on the fundamentals of a project, there is also an intuitive aspect to this decision making process. Saying then that others’ intuition is ‘better’ or leads to more money is saying that their inner compass is better and that ours is inherently worse. This is self-loathing and definitely does not do any good to gaining clarity on what our own inner compass is saying. There are literally an infinite number of ways you can make money by investing, especially now with markets like cryptocurrency. Everybody has different qualities, sees the world in a different way, and therefore sees different opportunities in the market. Authentic perception is a largely unexplored territory for many people and gaining that self awareness is often extremely uncomfortable, as it requires many ego deaths. Therefore, we are naturally inclined to cope by cementing ourselves into a victim position by comparing ourselves to people who are excelling (even if it is only in one particular aspect of their life.)
Yet, it is difficult to hold space mentally for the fact that there will come other opportunities that may be more in alignment for you to buy into. When we quantify monetary gains or losses, we use the price of an asset. Prices come to be as a result of the laws of supply and demand being at work, but price is also a function of the quantity available of an asset. Therefore, when we invest or trade, we are constantly working within the frame of reference that assets and money are ultimately scarce.
In a way, being open and trusting that the market will give new opportunities is completely incompatible with the assumption of ultimate scarcity. As a consequence, we may not be able at all to make sense of the feelings we feel when we should ‘open up’. It might feel completely out of control. We have to trust that the universe is infinitely abundant, yet the laws of supply and demand are based upon the principle of scarcity. Another way to say this is newfound intuition on fresh opportunities is non-linear and multidimensional. That intuition changes the mental vector space in which we are operating when we make reasonings around our investment strategy. The emotions that accompany that intuition are literally hard to ‘make space for’, because they are not defined within our current frame of reference (or comfort space). Processing these emotions require us surpass a certain inflection point, through which we move into a new perspective and accompanied mental framework to invest from.
What can we do when we experience FOMO related to the topic of comparison thinking. Ultimately it is about taking responsibility for your unique perception and work from there. You can use the analysis and perception of other people as a tool to form your own opinion on whether it is a good idea for you personally to be invested. Yet, not every asset will work for every person, even if it is an asset that is objectively a good investment. The law of karma is unfathomable and the acquisition of assets form no exception to this.
Thank you for reading my article. If you are interested in my work or want to book a personal session, do not hesitate to get in contact by sending me a message here on Medium.
