FOMO No More: The Strategy to Master Your Investing Fears

Ever felt that heart-pounding, gut-wrenching sensation of watching the stock market soar while you’re sitting on the sidelines? That’s what we in the biz call ‘Investing FOMO’ – the Fear Of Missing Out. It’s like being the last one picked for dodgeball, but with your hard-earned cash on the line. Well, no more, for today you’ll learn how to conquer this beast once and for all. 

The FOMO Phenomenon: More Than Just a Buzzword

Investing FOMO, or Fear Of Missing Out, is a psychological disparity that affects investors of all sizes. It’s not just about the numbers and ratios, but the emotional roller coaster that comes with the market’s unpredictable behavior. Even the High Networth Investors (HNIs) are not immune to this psychological trap.

But here’s the kicker: the other side of the fence isn’t any safer. Waiting it out doesn’t offer a safe haven either. As Shaily Gang, Head-Products at Tata Asset Management, puts it, ‘Waiting might not be a good option.’

It’s Not About Timing, It’s About Time

Here’s a nugget of wisdom from the investing world: ‘It’s not about timing the market, it’s about time in the market.’ The longer you spend in the market, the higher your total corpus becomes, thanks to the magic of compounding. Waiting for the market bottom to form could mean missing out on valuable ‘time in the market.’

Keeping your money in hand (i.e., waiting in cash) while the market is on an upward trend could result in potential losses. All those SIP tranches could have earned you a pretty penny!

Beware of the Traps

Investing isn’t a walk in the park. There are pitfalls to watch out for. One of the biggest offenders? Those little apps on your computer or phone that you check every few minutes. Getting investing advice from the internet, social media, or finfluencers can be a dangerous game. As Mayank Bhatnagar, Chief Operating Officer at FinEdge, warns, these mediums often circulate biased advice that isn’t in the long-term interest of any investor.

But don’t go overboard with your research either. Spending hours analyzing financial markets can lead to ‘analysis paralysis’ and trigger a whole new set of behavioral biases.

Expert Guidance and a Well-Structured Plan

So, how do you navigate this tricky terrain? The answer lies in seeking the support and inputs of an unbiased investing expert. They can help you invest according to a well-structured financial plan and guide you through the market cycles until you gain confidence in equity investing.

Following a robust investing process, staggering investments into the market through STPs, and investing with clear long-term goals in mind are much better strategies for wealth creation, says Bhatnagar.

The Discipline: Stick to the Plan

Discipline is key when it comes to investing. An investor who starts SIPs earlier and sticks to the plan can build higher absolute wealth than the investor who waits for the market bottom to form. Even if the markets are at elevated levels and you decide to test the waters, experts have some advice on how to go about it.

Systematic Investment Plans or Systematic Transfer Plans (STPs) are most suitable as they deploy a fixed amount regularly, resulting in rupee cost averaging. They offer a disciplined way to invest in any market conditions without worrying about the timing.

Asset Allocation and Portfolio Diversification

Asset allocation and portfolio diversification are key in any market condition. Investors should stay focused on them, advises Radhika Gupta, MD & CEO of Edelweiss Asset Management.

Investing FOMO may be a formidable foe, but with the right tools and strategies, you can turn this fear into your greatest asset. Remember, the only thing to fear is fear itself… and maybe spiders. But mostly fear.