What is the Fear of Missing Out (FOMO) (financial term)?

"Fear of Missing Out (FOMO)" is the fear of missing out on things, or the uneasy feeling that you are missing the boat and that others are experiencing more fun, interesting things or seizing more opportunities than you are at that moment. This phenomenon is often reinforced by social media, where you are constantly kept up to date with what others are doing.

In the financial world, FOMO manifests itself as the fear among investors of missing out on interesting investment opportunities. This fear can cause investors to massively invest in promising companies or markets even if they become overvalued. This can happen in the technology sector, for example, where the fear of not getting into a "new Facebook or Alibaba" can drive up valuations of young companies and lead to overvaluation or bubbles.

Version:
26/9/24