Article Sidebar
Main Article Content
Abstract
This study explores the impact of Fear of Missing Out (FOMO) on stock market investment behavior, focusing on how psychological and emotional factors influence investors' decision-making processes. The primary objective of the research is to investigate the relationship between FOMO and key behavioral trends, such as overtrading, speculative investing, and the formation of asset bubbles. A qualitative research approach was employed, utilizing a literature review of existing studies on behavioral finance, FOMO, and stock market dynamics. The findings indicate that FOMO significantly affects investors by amplifying emotional reactions to market trends, leading to irrational decisions that prioritize short-term gains over long-term financial stability. Social media and technology play a critical role in amplifying FOMO, creating herd behavior that contributes to market volatility and speculative bubbles, as seen in phenomena like "meme stocks." The study also reveals that younger investors are more susceptible to FOMO, largely due to their reliance on social media for investment advice. The results suggest that enhancing financial literacy and promoting disciplined, long-term investment strategies are essential for mitigating the negative effects of FOMO. Regulatory interventions targeting misinformation on digital platforms may also help reduce the prevalence of FOMO-driven investment behavior. Future research should further investigate the psychological mechanisms behind FOMO and explore the long-term sustainability of FOMO-driven market practices.
Keywords
Article Details
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
References
- Baker, S. R., Bloom, N., Davis, S. J., & Terry, S. J. (2021). COVID-induced economic uncertainty. Journal of Public Economics, 191, 104274. https://doi.org/10.1016/j.jpubeco.2020.104274
- Baumgartner, S. E. (2017). FOMO among millennials: The impact of social media on investment decisions. Journal of Behavioral Finance, 18(3), 181-192. https://doi.org/10.1080/15427560.2017.1366493
- Da, Z., Engelberg, J., & Gao, P. (2015). The sum of all fears: Investor sentiment and asset prices. The Review of Financial Studies, 28(1), 1-32. https://doi.org/10.1093/rfs/hhu072
- Hodkinson, C. (2019). Fear of missing out (FOMO) marketing appeals: A conceptual model. Journal of Marketing Communications, 25(1), 65-88. https://doi.org/10.1080/13527266.2016.1234504
- Hoffman, D. L., Novak, T. P., & Stein, R. N. (2020). The digital consumer and the FOMO pandemic. Journal of Business Research, 117, 557-565. https://doi.org/10.1016/j.jbusres.2020.06.046
- Przybylski, A. K., Murayama, K., DeHaan, C. R., & Gladwell, V. (2013). Motivational, emotional, and behavioral correlates of fear of missing out. Computers in Human Behavior, 29(4), 1841-1848. https://doi.org/10.1016/j.chb.2013.02.014
- Smales, L. A. (2021). Meme stocks, social media, and the fear of missing out. Finance Research Letters, 43, 101977. https://doi.org/10.1016/j.frl.2021.101977
- Statman, M. (2019). Behavioral finance: The second generation. CFA Institute Research Foundation. https://doi.org/10.2470/rf.v2019.n1
References
Baker, S. R., Bloom, N., Davis, S. J., & Terry, S. J. (2021). COVID-induced economic uncertainty. Journal of Public Economics, 191, 104274. https://doi.org/10.1016/j.jpubeco.2020.104274
Baumgartner, S. E. (2017). FOMO among millennials: The impact of social media on investment decisions. Journal of Behavioral Finance, 18(3), 181-192. https://doi.org/10.1080/15427560.2017.1366493
Da, Z., Engelberg, J., & Gao, P. (2015). The sum of all fears: Investor sentiment and asset prices. The Review of Financial Studies, 28(1), 1-32. https://doi.org/10.1093/rfs/hhu072
Hodkinson, C. (2019). Fear of missing out (FOMO) marketing appeals: A conceptual model. Journal of Marketing Communications, 25(1), 65-88. https://doi.org/10.1080/13527266.2016.1234504
Hoffman, D. L., Novak, T. P., & Stein, R. N. (2020). The digital consumer and the FOMO pandemic. Journal of Business Research, 117, 557-565. https://doi.org/10.1016/j.jbusres.2020.06.046
Przybylski, A. K., Murayama, K., DeHaan, C. R., & Gladwell, V. (2013). Motivational, emotional, and behavioral correlates of fear of missing out. Computers in Human Behavior, 29(4), 1841-1848. https://doi.org/10.1016/j.chb.2013.02.014
Smales, L. A. (2021). Meme stocks, social media, and the fear of missing out. Finance Research Letters, 43, 101977. https://doi.org/10.1016/j.frl.2021.101977
Statman, M. (2019). Behavioral finance: The second generation. CFA Institute Research Foundation. https://doi.org/10.2470/rf.v2019.n1