“But I would buy Sberbank shares at 200 rub. in the end 2020 G. and would have sold in May by 320 rub., I would go on vacation ". Why didn't I buy Virgin Galactic at $15?"" A classmate managed to make money on the crypt ".
If at least once you had such thoughts, quite possible, you suffered from loss of profit syndrome. Let's figure it out, what it is, how it manifests itself among investors, And, main, how to deal with it.
What is loss of profit syndrome
FOMO - Fear of missing out or loss of profit syndrome (DRY) - obsessive fear of missing an event or a profitable opportunity, in our case - investment.
This syndrome can overtake you in almost any day-to-day situation.. Standing in traffic, you can think: "Why does he have a BMW?, and I have an old Renault?"- and all day to remember missed chances to get rich. Scrolling through the feed in the social network, you will find, that someone sells a simple dimple and rests in the Emirates - and you spend the weekend at an old dacha. What can we say about investments, when examples of "successful success" are shown to you at every step and it seems, that your personal tactics are wrong.
The FOMO problem is not new and is the subject of a lot of psychological research.. In our time, the issue has become especially acute.: information has become more accessible, than a means of verification, how embellished it is and is it at all reliable.
Considered, that FOMO is not a disease, but in rare cases, this condition turns into depression and requires the help of a psychotherapist.
Test: FOMO at the investor
Answer the following questions, "Yes or no":
• I check the quotes in my portfolio more often, how 2 once a day. Constantly looking for news and events, but I make incorrect predictions, why I'm angry
• Happened, what all, besides me, Know, in which direction this or that asset will move, and I missed the move
• I want to trade like Buffett, therefore I often attend all kinds of investment events in the hope of gaining unique knowledge. Does not work, and I want even more theory from different speakers
• I do a lot of actions, which should lead me to financial success, but to no avail - I blame myself for it and get distracted by other things.
• Monitor my portfolio every 5 minutes and upset because of every red value
• If negative news has reduced the value of my portfolio, I can impulsively close a position or change the direction of a trade, not understanding the situation
• If the return on my investment is significantly lower, than other investors, I am looking for new opportunities and ready to take risks, even if I don't really understand, how the new asset works
• I am trying to repeat someone else's strategy, not counting on their own conclusions - if this investor is more successful, his recommendation is enough
• It happened: I thought, that the asset will grow in value, but was afraid to enter the position - the asset grew, and I'm very sorry
• I expected to make "a couple of bucks" on oil futures a day, quit your job and rest abroad. But here's the bad luck, because of the statements of OPEC I have lost 10% Portfolio, Decided, that I am not smart enough for stock trading and no longer want to enter the market
If half or more of the answers are "Yes", Most likely, you are subject to FOMO. Can't be predicted, whether the effect is temporary or permanent. It's okay to have these feelings.. But, if you want to be successful in investing, you need to learn to cope with the negative influence of FOMO.
There was a case, but what to do
There are two harmless ways out of the situation: quit everything and focus on something else, - but not a fact, that the situation will not repeat there, - either treat the problem reasonably.
In order not to live life in illusions and torments about failure, focus on yourself and your goals, and not on "success" from the Internet. Don't live on social media: unsubscribe from unnecessary groups and mailings, turn off unnecessary notifications on your phone.
Often spoken, that the ability to cope with psychological problems is almost the most important sign of a successful investor. And indeed it is. You need to fight FOMO in your head.
Action 1. Deal with that, what is the problem. Stop lying to yourself or being “pissed off” about the success of others. Instead of a question: “Why is he, but I didn’t come up with this idea?»Say so: "Well done, I will analyze the situation in more detail and next time I will build my chain of actions in a different way ".
Action 2. Remember the conversation between the characters of DiCaprio and McConaughey in the movie "The Wolf of Wall Street"? The bottom line is, that no one can look into the future, not every strategy is destined to succeed. If you missed out on a strong IPO or a massive rally, don't worry., opportunities will still be. The market constantly creates new conditions for investment ideas, which you can use. And following the Action 1 you will be ready.
Read also: What is portfolio rebalancing and how to do it
Quick tips for investors
• No ideas - wait and explore the possibilities
• Set clear goals for short and long distances
• Not sure - don't
• If everything went wrong, as expected - don't worry and draw conclusions
• Choose your tools carefully, make a portfolio, analyze the market
• Remember the diversification rules
Investments and personal finance. Part II: How to achieve your goals
5 Signs, that the stock is not worth buying
Personal experience
It is almost impossible to invest and not face the loss of profit syndrome. BCS Express experts share their personal experience, how did they manage to overcome FOMO.
Igor Galaktionov
Pavel Gavrilov
Vasily Karpunin
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