The fear of missing out (F.O.M.O)
During investing, you may panic every time you think that you may miss out on a great opportunity. The thought of other people grabbing the opportunity before you do can cause panic. Since the market keeps on changing, investors are on always alert since they don’t want to be left behind. Though this fear heightens your senses, acting on your motion can prevent you from making the right decision.
Risk is part of investing, and it is through taking risks that investors gain rewards. You should, however, try to evaluate your risk tolerance and determine how much risk you are comfortable with. Know what you can afford to lose from the investment and avoid going beyond your limits.
As you invest, you need to come up with a budget to avoid making losses. A budget should guide you in making the right investment decisions. You should also develop a clear investment strategy and set goals. Know if you are investing for short term or long term purposes. This fear makes you follow others blindly while making decisions based on emotional impulses. Instead of taking such actions, you should come up with a plan and make informed decisions based on your investment goals.