FOMO most often expresses itself as performance-chasing: piling into assets after they’ve already delivered eye-catching gains. The painful irony is that the very visibility of past success attracts late money, and late money tends to experience mean reversion.
In other words, the emotion of “I can’t miss this” frequently arrives at the moment when the opportunity is most crowded. As Jason Zweig has repeatedly noted in his Wall Street Journal columns on investor behavior, ordinary investors commonly underperform the funds they invest in because they buy after good runs and sell after bad ones—FOMO at the top, fear at the bottom. [...]
