Introducing A New Relative To FOMO

Fear of missing out, or FOMO is something we all struggle with. One of the four fears of trading, I recently penned a blog about my recent battle with the 'disease', and how it shaped my trading for better or worse.  We want to participate, we want to be in the game and trade or invest. It's painful to watch the markets move upward as we sit and stare from the sidelines.

 

But there are times when it's appropriate and even acceptable to step aside and wait your turn.  When we are in a bearish environment, trading/investing becomes a daunting task.  Are we getting in at good prices?  Will we regret our decision?  Is a positive move just fleeting?

 

What is it about the stock market that makes us desire to be in the game at all times?  The unpredictability, the unknown outcome and the risk.  But our desire to satisfy needs can be treacherous to our wealth, a dangerous prospect in difficult times.  

 

But there is a solution - and it is called JOMO -- the Joy of Missing Out.  That's right, we can be very happy and satisfied sitting on the sidelines and waiting for a better moment.  The joy of missing out on big moves down, having cash on the sidelines is the ultimate win - even if our accounts do not rise.

 

They say the 'return of capital' is often more important than the 'return on capital'.  What does that mean exactly?  Well, when you lose money it becomes an uphill climb to recover, and very difficult road ahead just to get back to even.  It may not even be our fault, but a loss is a loss.  

 

Keeping your money safe on the side until a better investing environment comes along is your guarantee of being ready for the next move, whatever it may be.  When we are confronted with highly volatile stock market days and we don't protect our assets they are entirely exposed.  Risk happens fast though, and prices may fall sharply and not come back quickly.  Can you afford to wait around for prices to recover just to break even?  

 

Take some advice, when the conditions are difficult to manage and you find yourself spinning your wheels or falling behind, take a dose of JOMO, sit back, relax and wait for a better moment. The Joy of Missing Out. Your account will thank you.