Jonathan Pond


Saving Yourself from FOMO

FOMO – fear of missing out – is a very real phenomenon that has been the subject of considerable research. FOMO is becoming even more acute thanks to social media and the speed with which information becomes disseminated. You hear about someone’s financial success or a big increase in the stock market and worry that you’re being left behind. This can lead to bad or at least ill-timed decisions. The same can be said for FOMO in declining markets where an investor may lament missing the opportunity to get out of bad investments before they plummeted.

Like most good habits, inoculating yourself against FOMO takes discipline. The day-to-day vacillations in the investment markets and the feelings of envy of those who apparently benefited mightily from some investments are going to get in the way of your otherwise sensible approach to your own financial life. Sure, some stock sectors or individual stocks hit it big in a single day, but these are the ones that usually lose as much or more soon thereafter. Who cares about the big winners, anyway? If you maintain a consistent approach to your investing and are prudent in your financial life, you’re almost bound to eventually be a big winner, leaving those afflicted with FOMO in the dust. 

Smart Money Tips

  • Never borrow to buy a depreciating asset. This is a tip that no one wants to hear, but it’s important to keep in mind. We’re hobbled by trillions in consumer debt and it’s safe to say that a good portion of the borrowing was to finance the high life rather than improve one’s financial future. You should only borrow for things that are going to prove financially beneficial to you in the future – like an education or a house or sensible home improvements. Enough said, but I fear that for many people this tip will go in one ear and out the other particularly during the holidays.
  • Earn a higher rate of interest by reducing your debt. Are you tired of low interest rates and would like to earn more than the smidgen of interest paid on savings and money market accounts? Would you like no-risk returns ranging from five to 20 percent? You can earn these returns by paying down your credit card, mortgage, and other loans. For example, paying down a 19 percent credit card balance is the equivalent of earning a 19 percent investment return. Making extra payments on your mortgage can also give you an attractive, risk-free return equivalent to whatever the interest rate is on your home mortgage or home equity loan which is a lot higher than what you earn with money sitting in a bank or a money market fund.


Best Wishes for a Wonderful Thanksgiving

Food for Thought

An investor needs to do very few things right as long as he or she avoids big mistakes.
Warren Buffett

Money Can Be Funny

It’s smart to do your holiday hinting early.
Arnold Glasow

Word of the Week

ambisinister (am-bi-SIN-uh-stuhr) – Clumsy with both hands.

Origin: From Latin ambi– (both) + sinister (on the left side) – literally, with two left hands.

Please don’t ask me to pass the turkey gravy. I’m ambisinister.