The Fear Of Missing Out (FOMO)


  • With the "trade war" still in progress, a stronger dollar, higher oil prices and rates, there will likely be concerns about forward quarters.
  • F.O.M.O. or the "Fear Of Missing Out" is the biggest detractor to long-term portfolio performance over time.
  • Don't allow short-term market movements to deviate you from your long-term investing goals.

The Fear Of Missing Out

Over the last couple of weeks, we have been discussing the market's advance from the lows and why retesting old highs was quite probable. To wit:

"While the bullish bias is definitely behind investors currently, there are concerns relative to the current risk/reward backdrop. As shown in the chart below, the market is not only back to more extreme overbought levels, it is also close to registering a short-term sell signal. With prices now compressed into a very tight range, the risk of a downside break has risen."

I have updated the chart to show a couple of important points.

As noted, the overbought condition (top panel) is now back to where it was the last time we were registering "all-time highs." Currently, that signal has flattened out to the point where it is dangerously close to crossing lower. Any additional weakness this coming week will likely trigger that sell signal.

Secondly, as noted by StockTrader's Almanac on Friday (shown above):

"As of the today's close, the slower moving MACD 'Sell' indicator applied to S&P 500 has turned negative. However, DJIA's MACD 'Sell' indicator is still positive. Because DJIA's indicator remains positive, the criteria to issue our Seasonal MACD Sell Alert has not been satisfied. Currently, a single-day DJIA decline in excess of 1.08% would be needed to turn DJIA's MACD indicator negative. A single day gain of 0.50% or more by S&P 500 would turn S&P 500's MACD indicator positive.

Continue to hold long positions associated with DJIA's and S&P 500's 'Best Six Months.' We will issue our Seasonal MACD Sell signal when corresponding MACD Sell indicators applied to DJIA and S&P 500 both crossover and issue a new sell signal."

That advice corresponds well with our current positioning as well. We remain

This article was written by

Lance Roberts profile picture
Unique, unbiased and contrarian real investment advice

After having been in the investing world for more than 25 years from private banking and investment management to private and venture capital; I have pretty much "been there and done that" at one point or another. I am currently a partner at RIA Advisors in Houston, Texas.

The majority of my time is spent analyzing, researching and writing commentary about investing, investor psychology and macro-views of the markets and the economy. My thoughts are not generally mainstream and are often contrarian in nature but I try an use a common sense approach, clear explanations and my “real world” experience in the process.

I am a managing partner of RIA Pro, a weekly subscriber based-newsletter that is distributed to individual and professional investors nationwide. The newsletter covers economic, political and market topics as they relate to your money and life.

I also write a daily blog which is read by thousands nationwide from individuals to professionals at

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