Behavioral Finance
What is FOMO (Fear of Missing Out)?
FOMO is the anxiety-driven urge to buy an asset that has already rallied sharply, fearing that prices will keep climbing without you. It is the single most common reason retail investors buy at tops.
Formula
N/A, emotional state amplified by social media and 24/7 financial news.
How to Interpret
Classic FOMO entries: buying NVIDIA only after a +200% run, jumping into Bitcoin only after a 5x rally, piling into IPOs at first-day pops, chasing meme-stock squeezes. The antidote is a written investment plan, position-sizing rules, and pre-defined entry criteria. If you find yourself opening a position 'because I can't watch it go up without me,' that is FOMO speaking, wait for a pullback or pass entirely.
Typical Ranges
N/A, emotion. Pre-commit via dollar-cost averaging or limit orders set well below current price.