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Glossary entry · Trade-offs
FOMO
Definition
Fear of missing out. The emotional pull to buy something that's already gone up a lot, because everyone else seems to be getting rich from it. Cousin of panic selling, same emotional system, opposite direction. Almost always drives investors to buy at peaks, just before the regret begins.
Example
Buying Bitcoin at $60,000 in late 2021, after a year of "to the moon" headlines, was a textbook FOMO trade.
Related
Trade-offs
Risk
The chance that an investment loses value, and how much it could lose.
Read →Volatility
How wildly an investment's price moves up and down. High volatility = bigger swings.
Read →Diversification
Spreading money across many different things so no single one can sink you.
Read →Bull & bear market
Long stretches of rising prices (bull) or falling prices (bear). Both end, eventually.
Read →