I Should Have Bought That!

I was discussing investments with a friend, and she regrets not buying Moderna stock (MRNA) only one month ago.  The stock closed at $152.52 on 12/04/20, but was trading in the $80 range less than 30 days prior.  Moderna is one of the biotechnology companies that are developing a Covid-19 vaccine.  The biotech corporation has experienced a 52% gain in share price since conducting successful preliminary rounds of vaccinations at the clinical trial level.  What she is experiencing is investor fear of missing out or FOMO.  The term describes the psychological stress brought on when one feels left out of something (Snyder, 2016).  Although she did not purchase any shares of MRNA, some of our colleagues bought equity positions back in November, and they are experiencing euphoria from a phenomenal gain at this very moment.

Unfortunately, being connected online on a constant basis can increase stress levels too.  It is important to invest at your own comfort level, and ignore what others are doing.  Many options are available to investors, but most have only a finite amount of funds to invest (Snyder, 2016).  Choosing funds that are both comfortable and in line with one’s risk tolerance are very important factors as well.  Chasing losses historically does not favor individual investors.  One should not try to rewrite history, because this type of behavior is short sighted.

I’ve experienced the fear of missing out too.  I’ve had several chances to buy Bitcoin and passed on these opportunities.  The cryptocurrency reached a high of $19,000 last week, and has nearly doubled since September (Reinicke, 2020).  I still have personal issues regarding Bitcoin as an investment and a currency.  The volatility and risk can be too much for some investors to endure.  The digital currency does not trade like a typical investment or a currency.  It is one of the hottest investing trends at this time, and it can be very easy to have FOMO (Reinicke, 2020).   

Bitcoin is the current trend that is being compared to Tulipmania, and will not die (Authers, 2020).  The silver lining to all of this is that I told my friend about my miss on Bitcoin, and she feels better about not investing in Moderna.  Investors should keep the long-term in perspective when investing.  Unless one truly does not want to own a piece of a company, then a short-term outlook would be appropriate.  Invest based on your own research and have no regrets.  Retirement funds and investing are a marathon and not a race.  When in doubt, please seek out guidance from a professional.  Pace yourself, and always remember to be positive. 

References:

Authers, J. (2020) Bitcoin Is the Tulipmania That Refuses to Die.  Retrieved from: https://www.bloomberg.com/opinion/articles/2020-12-01/bitcoin-is-the-tulipmania-that-refuses-to-die

Reinicke, C. (2020) Don’t get caught up in the hype as bitcoin hovers around $19,000.  Retrieved from:  https://www.cnbc.com/2020/12/02/dont-get-caught-up-in-the-hype-as-bitcoin-hovers-around-19000.html

Snyder, J. (2016) Operation FOMO:  Three Ways to Turn Customer Envy Into Engagement.  Retrieved from:  https://www.marketingprofs.com/articles/2016/31288/operation-fomo-three-ways-to-turn-customer-envy-into-engagement

*All of the images appearing in this blog are stock photos.