SEC Advises Against FOMO in Investment Decisions

In a recent announcement, the U.S. Securities and Exchange Commission (SEC) has urged people not to be driven by FOMO, the fear of missing out, when considering their investment choices. The SEC's Education and Investor Protection Division emphasized that just because others are buying a particular asset does not mean it's the right opportunity for everyone.

Lori Schock, the Director of the SEC's Office of Investor Education and Advocacy, stated that at some point in life, everyone experiences the feeling of missing out, even if it's not related to financial investments. She acknowledged that it can be challenging to resist this urge, but it's essential to exercise willpower when making investment decisions.

Schock pointed out that there has been a significant increase in interest in online investing lately, driven by the explosive growth of digital assets and the meme industry. She mentioned the initial coin offering (ICO) craze and the non-fungible token (NFT) sector as examples.

While many people see their favorite athletes, artists, or influencers promoting investment opportunities on social media, Schock emphasized that decisions should never be solely based on the recommendations of famous individuals. Buying and selling investments based on trends and influencer opinions due to the fear of missing out is not the best way to plan one's financial future, according to her.

Schock recommended that the best way to protect oneself and one's finances is to create a diversified investment portfolio, including various assets such as stocks, bonds, and more. It's also crucial to diversify risks within the same asset class, avoiding putting all funds into one or two securities and instead allocating resources across different industry sectors.