How do Bogleheads cope with FOMO? [Fear Of Missing Out]

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retire2022
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Re: How do Bogleheads cope with FOMO?

Post by retire2022 »

abuss368 wrote: Tue Dec 01, 2020 9:59 pm
deltaneutral83 wrote: Mon Sep 07, 2020 11:20 am By recalling what happened to big tech stocks in 2000-2001. Winning a bunch can and has gotten wiped out in one swoop before and will again. Good luck.
I would think a technology focused sector fund has stressed many investors in terms of missing out. The past 10 years have been all about US technology.
Oh Contra-ire, my Vanguard Information Technology VGT it dropped less than SP500 and VTI, it has been positive, I am up 44% on that fund.
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Re: How do Bogleheads cope with FOMO?

Post by abuss368 »

retire2022 wrote: Tue Dec 01, 2020 11:09 pm
abuss368 wrote: Tue Dec 01, 2020 9:59 pm
deltaneutral83 wrote: Mon Sep 07, 2020 11:20 am By recalling what happened to big tech stocks in 2000-2001. Winning a bunch can and has gotten wiped out in one swoop before and will again. Good luck.
I would think a technology focused sector fund has stressed many investors in terms of missing out. The past 10 years have been all about US technology.
Oh Contra-ire, my Vanguard Information Technology VGT it dropped less than SP500 and VTI, it has been positive, I am up 44% on that fund.
The way technology is, and these companies minting money (unlike 2000) I would not be surprised if this sector continued outperforming for some time. At some point there probably will be reversion to the mean.
John C. Bogle: “Simplicity is the master key to financial success."
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Re: How do Bogleheads cope with FOMO?

Post by rockstar »

abuss368 wrote: Tue Dec 01, 2020 11:32 pm
retire2022 wrote: Tue Dec 01, 2020 11:09 pm
abuss368 wrote: Tue Dec 01, 2020 9:59 pm
deltaneutral83 wrote: Mon Sep 07, 2020 11:20 am By recalling what happened to big tech stocks in 2000-2001. Winning a bunch can and has gotten wiped out in one swoop before and will again. Good luck.
I would think a technology focused sector fund has stressed many investors in terms of missing out. The past 10 years have been all about US technology.
Oh Contra-ire, my Vanguard Information Technology VGT it dropped less than SP500 and VTI, it has been positive, I am up 44% on that fund.
The way technology is, and these companies minting money (unlike 2000) I would not be surprised if this sector continued outperforming for some time. At some point there probably will be reversion to the mean.
These are now matured companies with little capital requirements and lots of cash and fat margins.
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Re: How do Bogleheads cope with FOMO?

Post by abuss368 »

rockstar wrote: Tue Dec 01, 2020 11:37 pm
abuss368 wrote: Tue Dec 01, 2020 11:32 pm
retire2022 wrote: Tue Dec 01, 2020 11:09 pm
abuss368 wrote: Tue Dec 01, 2020 9:59 pm
deltaneutral83 wrote: Mon Sep 07, 2020 11:20 am By recalling what happened to big tech stocks in 2000-2001. Winning a bunch can and has gotten wiped out in one swoop before and will again. Good luck.
I would think a technology focused sector fund has stressed many investors in terms of missing out. The past 10 years have been all about US technology.
Oh Contra-ire, my Vanguard Information Technology VGT it dropped less than SP500 and VTI, it has been positive, I am up 44% on that fund.
The way technology is, and these companies minting money (unlike 2000) I would not be surprised if this sector continued outperforming for some time. At some point there probably will be reversion to the mean.
These are now matured companies with little capital requirements and lots of cash and fat margins.
With wide moats!
John C. Bogle: “Simplicity is the master key to financial success."
WL2034
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Re: How do Bogleheads cope with FOMO?

Post by WL2034 »

nisiprius wrote: Mon Sep 07, 2020 11:32 am By sticking to a number of personal principles, that not everybody shares, but that I really do hold.
  • "Satisficing," not optimizing.
  • Knowing my personal goals, and measuring everything in an absolute way against my own goals.
  • Being in this for me, not to beat somebody else.
To some extent this runs against the cultural norm of consumerism. The main way a company can get you to switch to what they sell is by claiming that their product is better. That means they need to convince you of three things, not just one.
  1. My product is better.
  2. The difference actually matters.
  3. You must choose the best.
What do Coke and Pepsi agree on? They both agree that you need to decide which tastes best, and if it's the other one, switch.

Think about #3 long and hard. Why must you choose the best?

Quite apart from the difficulty of identifying the best, you can live a perfectly good life just saying "No thanks, I am perfectly happy with choices that probably aren't the best." If that shocks you, think about it just a little bit more. And, no, I don't mean anything about subtle personal criteria. I don't mean some intangible thing that makes the seemingly less good better for you. I mean not caring. I mean not sweating the small stuff.

If you see a penny on the sidewalk, you can choose not to pick it up. Not because you have made some interior calculation of the time it will take or the risk of overextending your shoulder and having it hurt. Just because you just don't care.

The whole goal of 99% of what you read about investing is to get you to care about and act on stuff that doesn't matter much.

I would add one note about fear of missing out. The really deadly mistake is staying out through prudence and good judgement, then getting tired of watching your friends getting rich (or saying they are getting rich) and finally giving up and jumping in.
A few months late to read this, but it really hit home for me. Thanks for the perspective.

I have my moments when I think about my friends telling me to buy Bitcoin when it was a few hundred dollars or buying TSLA in 2014-2015. I think of how much money I could've made if I had done one of those things. But the truth is, it would have been a lucky move based upon nothing but following the crowd. I'm sure I received other tips that I have since forgotten that would've turned out worse. I know there is a more successful financial strategy out there, but I don't know how to pick which one it is ahead of time! Ultimately, mine is good enough for me.

I have a boring Boglehead portfolio, somewhere between 70/30 and 80/20 (probably the latter after market performance since I rebalanced). Despite large losses, I didn't sell stocks in March 2020 (except to TLH), and I rebalanced into stocks on the way down and near the bottom earlier this year. That was the most anxiety provoking market I have experienced thus far, and I stuck to my plan. I feel good about that.

I wish I could make a brilliant stock play to make a huge amount of money, but I realize that I don't have the knowledge to do so.
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Re: Need reassurance - having FOMO

Post by 000 »

newguy123 wrote: Tue Dec 01, 2020 12:19 pm I lost 30% of my net worth this year
How?
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steve roy
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by steve roy »

I remember why we bought the funds we hold in the first place. And knowing that under-performers this year will be out-performers the next.

Patience is the key, and for me it was hard-learned.
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Re: How do Bogleheads cope with FOMO?

Post by dmcmahon »

LilyFleur wrote: Mon Sep 07, 2020 5:18 pm
anon_investor wrote: Mon Sep 07, 2020 5:04 pm That is what my play money allocation is for!
Exactly.
I bought about $10,000 of Apple on a dip last week, and then did a back-of-the-envelope calculation to see how much Apple I own in my various index funds. Including the 10k I bought last week, I own a bit more than $50k in Apple.

But by classifying my individual stock purchase as "play money," I get to remain a Boglehead :mrgreen:

I appreciate conversations with my 23-year-old. That way I know terms like FOMO, and I can feel like a somewhat cool 60-year-old.
I bought SNOW with play money for the same reason. Plus I’ll be cool at cocktail parties, if we ever have them again!
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by hudson »

Stef wrote: Wed Sep 09, 2020 11:19 am There is no FOMO if you are fully invested according to your risk tolerance. Everything is obvious in hind-sight. If I was into stocks, why should I have picked Tesla over Wirecard 6 months ago?
I agree with Stef. My conservative holdings passed the sleep test. If FOMO becomes a concern, I can always buy in.
If one has FOMO, maybe they should read W. Bernstein's Four Pillars and Ages of Investor before making changes.
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Re: How do Bogleheads cope with FOMO?

Post by deltaneutral83 »

rockstar wrote: Tue Dec 01, 2020 11:37 pm
abuss368 wrote: Tue Dec 01, 2020 11:32 pm
retire2022 wrote: Tue Dec 01, 2020 11:09 pm
abuss368 wrote: Tue Dec 01, 2020 9:59 pm
deltaneutral83 wrote: Mon Sep 07, 2020 11:20 am By recalling what happened to big tech stocks in 2000-2001. Winning a bunch can and has gotten wiped out in one swoop before and will again. Good luck.
I would think a technology focused sector fund has stressed many investors in terms of missing out. The past 10 years have been all about US technology.
Oh Contra-ire, my Vanguard Information Technology VGT it dropped less than SP500 and VTI, it has been positive, I am up 44% on that fund.
The way technology is, and these companies minting money (unlike 2000) I would not be surprised if this sector continued outperforming for some time. At some point there probably will be reversion to the mean.
These are now matured companies with little capital requirements and lots of cash and fat margins.
I certainly don't pretend to know what will happen but the tech wreck in 2000 made today's gains the last few years in FAANGM look like child's play. As a youngster I had a family member show me their CSCO purchase in mid 1997 and watched it sky rocket for 2.5 years and then crash. Split 6 or 7 times. I think the high was $81 down to $14. I think CSCO has beaten the S&P by about 70 bps annually since mid 1997 which is significant but wildly more volatile and certainly not a greater risk adjusted return I wouldn't guess, and the buy in mid 1997 was a great time to buy. I sincerely those that are purchasing TSLA hit it big and many already have, I just know it's not for me.
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Not selling is simple, FOMO is hard

Post by tiburblium »

[Thread merged into here, see below. --admin LadyGeek]

I've always found it easy to deal with the bear markets I've faced thus far, while I have only been an investor for 15 years not selling what I own has been a simple matter. As I am planning to be an accumulator for the foreseeable future for another 20-30 years, I welcome the idea of the markets being flat or in a downtrend so I have the opportunity to buy more shares.

While there is so much advice out there about not selling during market drops, I have found very little on resisting FOMO which is the much bigger challenge for me. It hasn't been easy is resisting these "new paradigm investments" which continue to appear. I've always liked the idea of being a Total World Index stock investor but I am concerned about "missing out" on things like Cryptocurrency which I currently have no exposure to, how does one account for these alternative investments which keep appearing? I am not looking to get rich quickly, just looking to keep ahead of inflation with my investments to meet my goals. If I am comfortable owning the world stock market, should I also consider owning some portion of these alternative investments? I realize there is no right answer as no one can predict the future, I am just looking for content worth reading or listening to on this subject. Aside from YouTubers like Ben Felix, does anyone have any recommended reading on FOMO with regards to alternative investments?
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Re: Not selling is simple, FOMO is hard

Post by arcticpineapplecorp. »

depends in part upon your definition.

alternative investments could be many things. cryptocurrency as an alt is a currency. another alt. inv. may be wine or art. still another may be private placements. these may be stocks or bonds just not for everyone but for selected investors or institutions rather than the open market (though this may change as they're allowed now in 401ks).

a stock and bond is obviously different from a cryptocurrency.

one (stock) has earnings, another (crypto) is merely speculation.

so it depends upon whether or what you want for alts. do you want all different kinds of alts or just crypto?

if it's just crypto, do you buy other currencies too?

if not, why do you want this currency?

because it's new? because it's gone up?

it also went from $19,650.01 on 12/15/17 to $3183.51 on 12/15/2018.

That's an 84% decline IN ONE YEAR.

you want that?
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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Re: Not selling is simple, FOMO is hard

Post by geerhardusvos »

tiburblium wrote: Wed Dec 02, 2020 10:13 am I've always found it easy to deal with the bear markets I've faced thus far, while I have only been an investor for 15 years not selling what I own has been a simple matter. As I am planning to be an accumulator for the foreseeable future for another 20-30 years, I welcome the idea of the markets being flat or in a downtrend so I have the opportunity to buy more shares.

While there is so much advice out there about not selling during market drops, I have found very little on resisting FOMO which is the much bigger challenge for me. It hasn't been easy is resisting these "new paradigm investments" which continue to appear. I've always liked the idea of being a Total World Index stock investor but I am concerned about "missing out" on things like Cryptocurrency which I currently have no exposure to, how does one account for these alternative investments which keep appearing? I am not looking to get rich quickly, just looking to keep ahead of inflation with my investments to meet my goals. If I am comfortable owning the world stock market, should I also consider owning some portion of these alternative investments? I realize there is no right answer as no one can predict the future, I am just looking for content worth reading or listening to on this subject. Aside from YouTubers like Ben Felix, does anyone have any recommended reading on FOMO with regards to alternative investments?
The root of your problem is greed and fear. That’s what the F stands for. Don’t be fearful. Do your homework about what kind of strategy you want. Then stick to that strategy for the next 80 years. Stocks are not cryptocurrencies. You need to read more about why we recommend a three fund portfolio and not a three fund plus bitcoin portfolio. Turn off the news. Stop being greedy. Stick to your plan and 20 to 30 years from now you will have learned a lot and you will also likely have reached your financial goals. Buy VT or VTI over and over again. Will it be the best investment over the next 20 or 30 years? Maybe not. Will it very likely be one of the best? Yes.
Last edited by geerhardusvos on Wed Dec 02, 2020 10:24 am, edited 1 time in total.
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familythriftmd
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Re: Not selling is simple, FOMO is hard

Post by familythriftmd »

tiburblium wrote: Wed Dec 02, 2020 10:13 am I've always found it easy to deal with the bear markets I've faced thus far, while I have only been an investor for 15 years not selling what I own has been a simple matter. As I am planning to be an accumulator for the foreseeable future for another 20-30 years, I welcome the idea of the markets being flat or in a downtrend so I have the opportunity to buy more shares.

While there is so much advice out there about not selling during market drops, I have found very little on resisting FOMO which is the much bigger challenge for me. It hasn't been easy is resisting these "new paradigm investments" which continue to appear. I've always liked the idea of being a Total World Index stock investor but I am concerned about "missing out" on things like Cryptocurrency which I currently have no exposure to, how does one account for these alternative investments which keep appearing? I am not looking to get rich quickly, just looking to keep ahead of inflation with my investments to meet my goals. If I am comfortable owning the world stock market, should I also consider owning some portion of these alternative investments? I realize there is no right answer as no one can predict the future, I am just looking for content worth reading or listening to on this subject. Aside from YouTubers like Ben Felix, does anyone have any recommended reading on FOMO with regards to alternative investments?
Is cryptocurrency even a matter of exposure? That would be like saying you need exposure to US Dollars(?)

I've finally started reading Random Walk [down wall street] and it does have a really enlightening section on cryptocurrency, and he very plainly describes it as a bubble. Reading at least that chapter may help to alleviate your current FOMO symptoms.

Bitcoin = Tulip Bulb Craze on steroids.
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Re: Not selling is simple, FOMO is hard

Post by chassis »

Choose a mentor, living or dead. One of mine is Warren Buffett. I don’t know him and he doesn’t know me. The other is my father in law.

I am reading The Essays of Warren Buffett by Cunningham. Excellent read.

Buffett says crypto won’t end well. I’m sticking with my mentor on that one. He also encourages to buy what you know. I don’t know crypto today. If I know it at some point, and if it hasn’t ended badly, I might invest. That could be 10-30 years from now.

Other possible mentors:

Ray Dalio
Benjamin Graham
JP Morgan (the man)
Andrew Carnegie
Henry Ford
Albert Sloan
and so on
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by LadyGeek »

I merged tiburblium's thread into the ongoing discussion. The combined thread is in the Investing - Theory, News & General forum (general discussion).
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
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Re: How do Bogleheads cope with FOMO?

Post by retire2022 »

deltaneutral83 wrote: Wed Dec 02, 2020 8:16 am
I certainly don't pretend to know what will happen but the tech wreck in 2000 made today's gains the last few years in FAANGM look like child's play. As a youngster I had a family member show me their CSCO purchase in mid 1997 and watched it sky rocket for 2.5 years and then crash. Split 6 or 7 times. I think the high was $81 down to $14. I think CSCO has beaten the S&P by about 70 bps annually since mid 1997 which is significant but wildly more volatile and certainly not a greater risk adjusted return I wouldn't guess, and the buy in mid 1997 was a great time to buy. I sincerely those that are purchasing TSLA hit it big and many already have, I just know it's not for me.
Hi deltaneutral

I am 60 year oldster.

I had narrowly selected four Tech funds in 1997 using the NY Times Quarterly reports of Mutual Funds, two of the tech funds Pilgram Baxter (PBTCX) Technology and Communications fund and TRowe Price Science and Technology Fund (PRSCX).

The 10k invested of PBTCX was in my taxable account, the other 6k was invested in my mother's traditional IRA.

By fall of 1999 my PBTCX was worth 40K and by March 2000 it was worth 70K. I decided it was a good run and exited.

A few weeks later the market crashed, the PRSCX from TRowe went up from 6K to 25K and went back down to 6K.

I used the 70K as a down payment on my purchase of my abode, once 911 happened, real estate prices dropped, it was a good time to buy.

It was a good run, my 70k served a purpose as part of my apartment purchase price.

The PRSCX was exited in 2008 financial crises.

My point is I was aware of the risk and understood when to get out.

Compound interest has mitigated my risk, my entire total contributions to my investments are approx 600k (32 years) and as of yesterday close it was 2.11million.

My Asset Allocation is currently 93/6

best
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Re: How do Bogleheads cope with FOMO?

Post by Dave55 »

abuss368 wrote: Tue Dec 01, 2020 11:32 pm
retire2022 wrote: Tue Dec 01, 2020 11:09 pm
abuss368 wrote: Tue Dec 01, 2020 9:59 pm
deltaneutral83 wrote: Mon Sep 07, 2020 11:20 am By recalling what happened to big tech stocks in 2000-2001. Winning a bunch can and has gotten wiped out in one swoop before and will again. Good luck.
I would think a technology focused sector fund has stressed many investors in terms of missing out. The past 10 years have been all about US technology.
Oh Contra-ire, my Vanguard Information Technology VGT it dropped less than SP500 and VTI, it has been positive, I am up 44% on that fund.
The way technology is, and these companies minting money (unlike 2000) I would not be surprised if this sector continued outperforming for some time. At some point there probably will be reversion to the mean.
Tony are they minting as much money as you? Please share with your buddies! :wink:

Dave
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Re: How do Bogleheads cope with FOMO?

Post by abuss368 »

Dave55 wrote: Wed Dec 02, 2020 2:15 pm
abuss368 wrote: Tue Dec 01, 2020 11:32 pm
retire2022 wrote: Tue Dec 01, 2020 11:09 pm
abuss368 wrote: Tue Dec 01, 2020 9:59 pm
deltaneutral83 wrote: Mon Sep 07, 2020 11:20 am By recalling what happened to big tech stocks in 2000-2001. Winning a bunch can and has gotten wiped out in one swoop before and will again. Good luck.
I would think a technology focused sector fund has stressed many investors in terms of missing out. The past 10 years have been all about US technology.
Oh Contra-ire, my Vanguard Information Technology VGT it dropped less than SP500 and VTI, it has been positive, I am up 44% on that fund.
The way technology is, and these companies minting money (unlike 2000) I would not be surprised if this sector continued outperforming for some time. At some point there probably will be reversion to the mean.
Tony are they minting as much money as you? Please share with your buddies! :wink:

Dave
You are too much Dave! That was actually good.

Made me laugh after a very intense day sir.

Best.
Tony
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oken
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Re: How do Bogleheads cope with FOMO?

Post by oken »

nisiprius wrote: Mon Sep 07, 2020 11:32 am By sticking to a number of personal principles, that not everybody shares, but that I really do hold.
  • "Satisficing," not optimizing.
  • Knowing my personal goals, and measuring everything in an absolute way against my own goals.
  • Being in this for me, not to beat somebody else.
To some extent this runs against the cultural norm of consumerism. The main way a company can get you to switch to what they sell is by claiming that their product is better. That means they need to convince you of three things, not just one.
  1. My product is better.
  2. The difference actually matters.
  3. You must choose the best.
What do Coke and Pepsi agree on? They both agree that you need to decide which tastes best, and if it's the other one, switch.

Think about #3 long and hard. Why must you choose the best?

Quite apart from the difficulty of identifying the best, you can live a perfectly good life just saying "No thanks, I am perfectly happy with choices that probably aren't the best." If that shocks you, think about it just a little bit more. And, no, I don't mean anything about subtle personal criteria. I don't mean some intangible thing that makes the seemingly less good better for you. I mean not caring. I mean not sweating the small stuff.

If you see a penny on the sidewalk, you can choose not to pick it up. Not because you have made some interior calculation of the time it will take or the risk of overextending your shoulder and having it hurt. Just because you just don't care.

The whole goal of 99% of what you read about investing is to get you to care about and act on stuff that doesn't matter much.

I would add one note about fear of missing out. The really deadly mistake is staying out through prudence and good judgement, then getting tired of watching your friends getting rich (or saying they are getting rich) and finally giving up and jumping in.
What a great perspective! Lightbulb moment really. Thank you for sharing.
Why should I constantly seek to optimise instead of just sticking with what has worked well for so many others so far.

I certainly don't go around looking at other women wondering if I chose the best or if I should switch.
(Mrs oken is not on this board. Far as I know... =p)
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by tim1999 »

I succumbed to the FOMO and finally purchased one share of TSLA today. Just felt like I'm the only guy left not getting rich off of it. So I guess it will start going down now.
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by checkyourmath »

Just be like everyone else Puts on ETFs and Calls on individual stocks.
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Re: How do Bogleheads cope with FOMO?

Post by rockstar »

abuss368 wrote: Tue Dec 01, 2020 11:40 pm
rockstar wrote: Tue Dec 01, 2020 11:37 pm
abuss368 wrote: Tue Dec 01, 2020 11:32 pm
retire2022 wrote: Tue Dec 01, 2020 11:09 pm
abuss368 wrote: Tue Dec 01, 2020 9:59 pm

I would think a technology focused sector fund has stressed many investors in terms of missing out. The past 10 years have been all about US technology.
Oh Contra-ire, my Vanguard Information Technology VGT it dropped less than SP500 and VTI, it has been positive, I am up 44% on that fund.
The way technology is, and these companies minting money (unlike 2000) I would not be surprised if this sector continued outperforming for some time. At some point there probably will be reversion to the mean.
These are now matured companies with little capital requirements and lots of cash and fat margins.
With wide moats!
This isn't 2000 anymore. You can buy an index of a lot of tech names to spread out your risk. The S&P 500 is heavy with them too.
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Re: How do Bogleheads cope with FOMO?

Post by abuss368 »

rockstar wrote: Wed Dec 02, 2020 10:10 pm
abuss368 wrote: Tue Dec 01, 2020 11:40 pm
rockstar wrote: Tue Dec 01, 2020 11:37 pm
abuss368 wrote: Tue Dec 01, 2020 11:32 pm
retire2022 wrote: Tue Dec 01, 2020 11:09 pm

Oh Contra-ire, my Vanguard Information Technology VGT it dropped less than SP500 and VTI, it has been positive, I am up 44% on that fund.
The way technology is, and these companies minting money (unlike 2000) I would not be surprised if this sector continued outperforming for some time. At some point there probably will be reversion to the mean.
These are now matured companies with little capital requirements and lots of cash and fat margins.
With wide moats!
This isn't 2000 anymore. You can buy an index of a lot of tech names to spread out your risk. The S&P 500 is heavy with them too.
That is an excellent point. Technology indexes are very good today.
John C. Bogle: “Simplicity is the master key to financial success."
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by JonnyDVM »

If you want to buy some overhyped garbage that will almost certainly leave you holding the bag to get the FOMO out of your system I can give you a few prospects...
I’d trade it all for a little more | -C Montgomery Burns
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Re: Need reassurance - having FOMO

Post by newguy123 »

000 wrote: Wed Dec 02, 2020 1:43 am
newguy123 wrote: Tue Dec 01, 2020 12:19 pm I lost 30% of my net worth this year
How?
shorting tesla with puts
Would I rather relax and make money or make money and relax ?
EnjoyIt
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Re: How do Bogleheads cope with FOMO?

Post by EnjoyIt »

nisiprius wrote: Mon Sep 07, 2020 11:32 am By sticking to a number of personal principles, that not everybody shares, but that I really do hold.
  • "Satisficing," not optimizing.
  • Knowing my personal goals, and measuring everything in an absolute way against my own goals.
  • Being in this for me, not to beat somebody else.
To some extent this runs against the cultural norm of consumerism. The main way a company can get you to switch to what they sell is by claiming that their product is better. That means they need to convince you of three things, not just one.
  1. My product is better.
  2. The difference actually matters.
  3. You must choose the best.
What do Coke and Pepsi agree on? They both agree that you need to decide which tastes best, and if it's the other one, switch.

Think about #3 long and hard. Why must you choose the best?

Quite apart from the difficulty of identifying the best, you can live a perfectly good life just saying "No thanks, I am perfectly happy with choices that probably aren't the best." If that shocks you, think about it just a little bit more. And, no, I don't mean anything about subtle personal criteria. I don't mean some intangible thing that makes the seemingly less good better for you. I mean not caring. I mean not sweating the small stuff.

If you see a penny on the sidewalk, you can choose not to pick it up. Not because you have made some interior calculation of the time it will take or the risk of overextending your shoulder and having it hurt. Just because you just don't care.

The whole goal of 99% of what you read about investing is to get you to care about and act on stuff that doesn't matter much.

I would add one note about fear of missing out. The really deadly mistake is staying out through prudence and good judgement, then getting tired of watching your friends getting rich (or saying they are getting rich) and finally giving up and jumping in.
A wise and very good respected surgeon once told me and I will paraphrase.

“The enemy of good is better. Go in and do a good job, while in there do not strive to keep making it better and better because every extra action risks making a mistake and eventually harming the patient.“
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
Nowizard
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by Nowizard »

Depends on your focus. Missing out is typically retrospective when comparing what you could have done and is the key to all those articles that cherry pick to support a particular stock or financial advisor. We all have some regrets for investment decisions but most move toward reasonable goals with time. Incidentally, we also compare our returns with benchmarks in times when the market is receding. Having become more conservative over the years, we enjoy "missing out" on market returns at those times and say that "Sometimes, we make more by losing less" when comparing to benchmarks. That occurs when the overall portfolio portfolio is less than the 50th percentile. Yes, that means we technically miss out on some returns during boom times, but is consoling when the market is choppy or receding.

Tim
BalancedJCB19
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by BalancedJCB19 »

I just repeat the sentence. Fear or Greed has no place for a sensible investing plan. Remember why you chose this path. It's a stress free investing philosophy that has stood the test of time because it's common sense and math. Keep investing simple, stick to an asset allocation you can live with and ignore everything else because it serves no purpose. Impulsivity is the enemy!
rockstar
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Re: How do Bogleheads cope with FOMO?

Post by rockstar »

abuss368 wrote: Wed Dec 02, 2020 10:46 pm
rockstar wrote: Wed Dec 02, 2020 10:10 pm
abuss368 wrote: Tue Dec 01, 2020 11:40 pm
rockstar wrote: Tue Dec 01, 2020 11:37 pm
abuss368 wrote: Tue Dec 01, 2020 11:32 pm

The way technology is, and these companies minting money (unlike 2000) I would not be surprised if this sector continued outperforming for some time. At some point there probably will be reversion to the mean.
These are now matured companies with little capital requirements and lots of cash and fat margins.
With wide moats!
This isn't 2000 anymore. You can buy an index of a lot of tech names to spread out your risk. The S&P 500 is heavy with them too.
That is an excellent point. Technology indexes are very good today.
Here are your choices:

1) try to pick the individual company that's going to soar
2) buy an index with a high concentration of high flyers
3) buy the total market and dilute your return by holding a lot of garbage
EnjoyIt
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Re: How do Bogleheads cope with FOMO?

Post by EnjoyIt »

rockstar wrote: Thu Dec 03, 2020 9:46 am
abuss368 wrote: Wed Dec 02, 2020 10:46 pm
rockstar wrote: Wed Dec 02, 2020 10:10 pm
abuss368 wrote: Tue Dec 01, 2020 11:40 pm
rockstar wrote: Tue Dec 01, 2020 11:37 pm

These are now matured companies with little capital requirements and lots of cash and fat margins.
With wide moats!
This isn't 2000 anymore. You can buy an index of a lot of tech names to spread out your risk. The S&P 500 is heavy with them too.
That is an excellent point. Technology indexes are very good today.
Here are your choices:

1) try to pick the individual company that's going to soar
2) buy an index with a high concentration of high flyers
3) buy the total market and dilute your return by holding a lot of garbage
Edit to 3 above
Buy the total market and dilute your returns by holding a lot of garbage or minimize losses by not making the mistake of concentrating in garbage.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
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abuss368
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Re: How do Bogleheads cope with FOMO?

Post by abuss368 »

rockstar wrote: Thu Dec 03, 2020 9:46 am
abuss368 wrote: Wed Dec 02, 2020 10:46 pm
rockstar wrote: Wed Dec 02, 2020 10:10 pm
abuss368 wrote: Tue Dec 01, 2020 11:40 pm
rockstar wrote: Tue Dec 01, 2020 11:37 pm

These are now matured companies with little capital requirements and lots of cash and fat margins.
With wide moats!
This isn't 2000 anymore. You can buy an index of a lot of tech names to spread out your risk. The S&P 500 is heavy with them too.
That is an excellent point. Technology indexes are very good today.
Here are your choices:

1) try to pick the individual company that's going to soar
2) buy an index with a high concentration of high flyers
3) buy the total market and dilute your return by holding a lot of garbage
Fair and reasonable. What is your preference for the above.
John C. Bogle: “Simplicity is the master key to financial success."
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by Anon9001 »

I think you desire positive skewness that individual stocks have. The 5-10% speculation part is quite useful for me as I invest in crypto-currencies and other assets like Indian small caps that are high risk to get positive skewness. You could do the same but be aware that the 5-10% could end up under-performing the investment part of the portfolio.
Land/Real Estate:89.0% Equities:5.0% Bonds:2.0% Gold:1.7% Cash:1.7% Cryptocurrency:0.2%
rockstar
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Re: How do Bogleheads cope with FOMO?

Post by rockstar »

abuss368 wrote: Thu Dec 03, 2020 11:25 am
rockstar wrote: Thu Dec 03, 2020 9:46 am
abuss368 wrote: Wed Dec 02, 2020 10:46 pm
rockstar wrote: Wed Dec 02, 2020 10:10 pm
abuss368 wrote: Tue Dec 01, 2020 11:40 pm

With wide moats!
This isn't 2000 anymore. You can buy an index of a lot of tech names to spread out your risk. The S&P 500 is heavy with them too.
That is an excellent point. Technology indexes are very good today.
Here are your choices:

1) try to pick the individual company that's going to soar
2) buy an index with a high concentration of high flyers
3) buy the total market and dilute your return by holding a lot of garbage
Fair and reasonable. What is your preference for the above.
I split my portfolio between VOO and QQQ. I could always go for momentum, which is a strong factor, but I prefer QQQ.
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steve roy
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by steve roy »

Just freaking index the market and be done with it.

You'll only know the optimum investment when you peer at it in the rearview mirror, when it's too late.
snailderby
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Re: How do Bogleheads cope with FOMO?

Post by snailderby »

rockstar wrote: Thu Dec 03, 2020 9:46 amHere are your choices:

1) try to pick the individual company that's going to soar
2) buy an index with a high concentration of high flyers
3) buy the total market and dilute your return by holding a lot of garbage
2. You can invest in an index with a high concentration of stocks that have done well in the past. That doesn't guarantee that those stocks will continue to outperform for the duration of your investment.
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hagridshut
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by hagridshut »

tim1999 wrote: Wed Dec 02, 2020 9:59 pm I succumbed to the FOMO and finally purchased one share of TSLA today. Just felt like I'm the only guy left not getting rich off of it. So I guess it will start going down now.
I remember feeling like I was the only person not getting rich on AAPL in 2012. AAPL has quadrupled since then, but I knew I wasn't likely to get rich off AAPL shares once the company had reached the Mega Cap range (AAPL soared to 500B or more around that time). If I wanted to get up to a million bucks on AAPL, I would have needed to invest 250k, an enormous sum.

My general advice is for people NOT to chase a stock once it's gotten to Mega Cap, if they want 10x or better gains.

It is better to look for the next opportunity. That's what I did. I had knowledge of the impending revolution in Machine Learning and saw what was happening in the cryptocurrency mining boom, so I got onboard with maybe 10% of my IRA in NVDA.

Pretty much everyone will miss out on opportunities. I did multiple times.

Look forward for opportunity. There's innovation going on everywhere and you may be able to find it. Just don't bet everything.

The vast majority of my investing purchases have been Index Funds, because I knew I could easily have been wrong in my stock picks.
First Principles: (1) Diversify (2) Low Cost (3) Stay the Course | 3-Fund Index Portfolio
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Nate79
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by Nate79 »

FOMO is built on immaturity, greed and envy. Not great characteristics to have.

This reminds me of the hot stock at the time GTAT and what turned out to be a disaster:
viewtopic.php?t=148446
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MortgageOnBlack
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by MortgageOnBlack »

Nate79 wrote: Thu Dec 03, 2020 11:51 pm FOMO is built on immaturity, greed and envy. Not great characteristics to have.

This reminds me of the hot stock at the time GTAT and what turned out to be a disaster:
viewtopic.php?t=148446
Anyone who is abruptly changing their strategy, jumping into/against a stock blindfolded because others are doing it, should read this thread.
I will admit, staying the course on a free-falling index fund is childs play compared to the contagious feeling of FOMO. Slap yourself and be content for what you have.

Stay the Course everyone :beer
daniel2000
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by daniel2000 »

n00b_to_investing wrote: Mon Sep 07, 2020 11:15 am ... seriously I have been pondering over this question ... by no means this is a call to seek "alternate" strategies ... I am sticking to my guns but would love to get your thoughts (qualitative and/or quantitative).
In today's no commission world just buy one share and call it a day.
Leave the rest of the money in a diversified portfolio of index funds.
Diversification.
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physixfan
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by physixfan »

I set up a separate account with ~5% fun money to play with stonks.
loukycpa
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by loukycpa »

Personally I cope with fear of being in this market more than I cope with FOMO. PE ratios, Schiller PE, etc. It all looks like the late 90s irrational exuberance when I first started contributing to my 401k and Roth IRA. This time around juiced by loose monetary policy and deficit spending. Back then I could buy high yielding REITS or I bonds/CDs with 3% real returns. In 2020 it feels like I have no decent alternatives.

What I did learn the hard way over the last 25 year span is that I can't time the market. Also that I am not better than the market at seeing the future and knowing who the next winners are. What I do know is that equities are nearly certain to outperform given a long enough time horizon (10+ years). So I will stay the course.
TheoLeo
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by TheoLeo »

I like to think that it is remarkably easy to capture the equity risk premium, or market premium, but trying to somehow outperform it is just a gamble for a retail investor like me. From a risk/return standpoint, concentrating your portfolio in just a handfull of stocks is an entirely different game than investing in a broadly diversified way. The risk/return characteristics are way worse when stock picking. So when would it make sense then to go pick stocks without insider information?

1. If earning anything less than a large alpha has zero value to you, i.e. if you are really really desperate for increasing your money fast.

2. If earning a lot less than market returns doesn't affect your life in a meaningfull way but you get entertainment value out of gambling with stocks, i.e. you already have way more money than you need.

I am neither desperate enough nor wealthy enough to gamble with stocks, so I stick with low cost, broadly diversified investing.
tiburblium
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Re: Not selling is simple, FOMO is hard

Post by tiburblium »

geerhardusvos wrote: Wed Dec 02, 2020 10:23 am
tiburblium wrote: Wed Dec 02, 2020 10:13 am I've always found it easy to deal with the bear markets I've faced thus far, while I have only been an investor for 15 years not selling what I own has been a simple matter. As I am planning to be an accumulator for the foreseeable future for another 20-30 years, I welcome the idea of the markets being flat or in a downtrend so I have the opportunity to buy more shares.

While there is so much advice out there about not selling during market drops, I have found very little on resisting FOMO which is the much bigger challenge for me. It hasn't been easy is resisting these "new paradigm investments" which continue to appear. I've always liked the idea of being a Total World Index stock investor but I am concerned about "missing out" on things like Cryptocurrency which I currently have no exposure to, how does one account for these alternative investments which keep appearing? I am not looking to get rich quickly, just looking to keep ahead of inflation with my investments to meet my goals. If I am comfortable owning the world stock market, should I also consider owning some portion of these alternative investments? I realize there is no right answer as no one can predict the future, I am just looking for content worth reading or listening to on this subject. Aside from YouTubers like Ben Felix, does anyone have any recommended reading on FOMO with regards to alternative investments?
The root of your problem is greed and fear. That’s what the F stands for. Don’t be fearful. Do your homework about what kind of strategy you want. Then stick to that strategy for the next 80 years. Stocks are not cryptocurrencies. You need to read more about why we recommend a three fund portfolio and not a three fund plus bitcoin portfolio. Turn off the news. Stop being greedy. Stick to your plan and 20 to 30 years from now you will have learned a lot and you will also likely have reached your financial goals. Buy VT or VTI over and over again. Will it be the best investment over the next 20 or 30 years? Maybe not. Will it very likely be one of the best? Yes.
Well said and I agree, I really like the idea of just remaining with VT forever, keeps things simple and I don't need to fret about trends. Part of me is a bit worried about these new emerging trends which may not be represented in my broad market index (crypto), but I still view crypto tokens as a collectable like Bennie babies or pokemon cards, and while collecting these certainly worked for some people, my preference would be to just avoid them if at all possible
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by RJC »

There's no FOMO when day-to-day shifts are in the thousands to tens of thousands. S&P 500 is 14% YTD.
GetMeToRetirement
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by GetMeToRetirement »

I like to think I avoid FOMO in the market the same way I avoid FOMO in the rest of my life: by identifying what matters most and what is "enough." If I keep my life consistent with those values and trust that I am implementing my long term plan to stay on track to achieve my realistic goals, I don't give an "F."
joaquin168q
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by joaquin168q »

I succumbed and I am actually ashamed. Up until March of this year, I was pretty proud of having a 4-fund portfolio and cash emergency fund equivalent to one year salary. However, mid- to late- march I put my entire emergency fund into individual stocks, and scaled back spending in April and diverted those funds into individual stocks. I finally gained my sanity back in May. However, I am still holding those stocks I purchased.
Northern Flicker
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by Northern Flicker »

I have a bigger fear of "missing in" by taking a concentrated position on something and guessing wrong.
Risk is not a guarantor of return.
angeleyes
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Re: How do Bogleheads cope with FOMO? [Fear Of Missing Out]

Post by angeleyes »

Concentrating your portfolio to only a few stocks is a good way to get very poor or very rich.
I rather own all stocks and that way I can't miss out on any spectacular rises, and thus don't need to suffer from FOMO
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Re: Need reassurance - having FOMO

Post by JonnyDVM »

dziuniek wrote: Tue Nov 24, 2020 9:22 am Here's some moonshots:

PLTR

Have a go :)
lol. You bought some of this garbage too???? I’ll see you on the moon brother :sharebeer
I’d trade it all for a little more | -C Montgomery Burns
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