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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.
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