The fear of missed opportunity... or how to miss your investments for sure!
Very present but not very penalizing in our daily life, the fear of the missed opportunity can lead to great disappointments in the management of personal finances.
Immediacy at the expense of reflexion...
The multiplication of social networks of all kinds, combined with the acceleration in the speed of data transmission (fiber, successive generations of mobile networks ...) reinforces the permanent fear of missing an event or information. As early as 1996, Dan Herman theorized this phenomenon, which he called "Fearof Missing Out"(FOMO).
The attachment of the younger generation to their mobile phones - and their dismay at the lack of mobile data reception - makes this scourge visible. Although it may seem anecdotal in everyday life, the fear of frustration over lost financial opportunity can be a major factor.
For example, this fear of regret can lead to a haste in making an investment because of the fear of the disappearance of a financial opportunity: a property that may no longer be available for sale, a price level that could rise again, a financial product whose marketing period is coming to an end soon... This haste in making an investment decision can easily lead to a sub-optimisation of finances: non-existent or partial analysis of the adequacy of the opportunity with our needs, erroneous perception of the proposed risk/return ratio, no search for more attractive alternatives...
In addition, there is a risk of falling into disreputable traps. Many financial scams rely on this fear of regret to prevent the investor from thinking about the relevance or truthfulness of the proposal made (returns too high, risks presented as non-existent). The very fact of explaining that an opportunity is reserved for the first comers or the "lucky" few, reinforces this fear of a missed opportunity and annihilates any desire to think about it, which would nevertheless be beneficial to the potential investor!
... even if it means fuelling a financial bubble
It's hard to fight against the more or less specialized media promoting the appeal of an asset class or against the social network feeds full of success stories related to these same investments. The fear of frustration linked to a missed opportunity pushes one to invest immediately so as not to become the one who is "left out", rather than waiting for the right moment. If it is already regrettable not to have invested in a financial investment that later turns out to be very profitable, this regret would be all the more bitter in the presence of unused cash that one would have let sleep! The difficulty is accentuated by the very principle of this cash: to remain liquid to be used in case of necessity ... or while waiting for an opportunity to be seized!
Beyond this lack of hindsight regarding the preservation of the right level of cash, the fear of missing a financial opportunity pushes some people to invest in investments that they would not have considered without this fear: if an asset class arouses the interest of others (increase in the amounts invested and/or appreciation of valuations), probably I must invest in it! These behaviours then feed a fashion effect (or mimicry), or even reinforce a financial bubble phenomenon. Moreover, as our resources are limited, trade-offs may be necessary, leading to unfortunate divestment decisions. If these decisions are widespread, they may lead to abnormal downward pressure on the price of certain assets.
Let's stop here ... lest we miss some important notifications on our phones!
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