Don't let FOMO from social media affect your investing decisions, experts say
BNN Bloomberg
Experts say that while basing investment strategies on information from social media isn't necessarily a bad thing, allowing FOMO to influence your buy and sell choices increases the odds of making decisions you later regret.
TORONTO - When scrolling through financial and investing content on social media, some young people say it can be hard not to get a sense of FOMO - a fear of missing out.
`[FOMO] can feel like you are behind or you're not where you are supposed to be. Like you will never attain X because you didn't invest in Bitcoin [early enough] or didn't invest before you were 26 years old,'' said Crystal Sills, a 30-year-old marketing co-ordinator and parts manager in Montreal.
Experts say that while basing investment strategies on information from social media isn't necessarily a bad thing, allowing FOMO to influence your buy and sell choices increases the odds of making decisions you later regret.
“I often see elements of investing I don't completely understand - like Wealthsimple's DIY platform and other forms of stock trading - and feel like I should participate,'' said Kyle Empringham, a 32-year-old director of social impact partnerships at a tech firm in Victoria.
If you do decide to go against the crowd, there can be lingering thoughts and doubt whether you made the right decision, Empringham added.
Neil Gross, chair of the Ontario Securities Commission's Investor Advisory Panel, said that investing in a popular stock to avoid being left behind is not a new phenomenon, but “social media puts FOMO on steroids,'' which is why we're seeing bubbles in so-called meme stocks such as GameStop, which shot to dizzying heights in early 2021 amid popularity on Reddit and stock trading apps such as Robinhood.
