Seeing other people making money can create a powerful sense: that being left out is worse than entering.
This behavior is known as FOMO, when the fear of missing out on an opportunity influences the decision.
The problem arises when urgency replaces the process. The investor can enter an asset without first defining why they are investing, what price they consider appropriate, or what risk they are willing to take on.
The market’s movement can continue, but it can also change. That’s why a decision based only on what other people are doing can increase exposure to risk.
A structured approach starts with simple questions: what is the thesis? What is the objective? Does the price make sense? What is the risk? What would make the thesis stop working?
COMPARISON → URGENCY → IMPULSIVE ENTRY → RISK
In contrast:
THESIS → CRITERION → PRICE → DECISION
FOMO is not a signal of opportunity. It is an emotional reaction that can influence the decision-making process. Separating opportunity from urgency helps analyze the market more clearly.
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