The acronym for fear of missing out. It describes the urge to buy or sell an investment quickly because you're anxious about not participating in gains or not avoiding losses. FOMO often leads to poor decisions because you're reacting emotionally rather than thinking carefully.
A hot stock rises 50 percent in a month and you see friends talking about their profits. You feel FOMO and buy it at the peak without researching the company. Days later, bad news causes the stock to fall 20 percent, and you regret the rushed decision.
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