Aman Singhal/AI-Generated Image
Summary: A young investor’s confidence is shaken after a reunion filled with money talk. What follows is a reminder of how easy it is to get swayed by others’ wins and why resisting that urge is important if you want to build wealth.
Naman, 30, has been investing in mutual funds for the past five years. He feels proud of his investing journey so far, having been disciplined and sticking to his monthly SIPs without fail. While his portfolio wasn’t flashy, it was steady and growing. For him, that consistency was a badge of honour.
Then came a school reunion, which dealt a huge blow to his pride.
The reunion moment
At the gathering, conversations drifted from careers to families and then, inevitably, to money. Rohan, one of Naman’s closest friends, jumped in with a grin. He boasted about a stock that doubled in just six months. The group admired his ‘brilliant pick’.
But before the applause faded, another friend, Gautam, chimed in, “Why are you still investing in stocks? They are old-school now. Bitcoin is where the money is. I’ve seen over 50 per cent returns in just a year.”
Suddenly, the room began buzzing with talk of hot investing tips, quick gains and overnight success stories.
And Naman? He sat quietly in a corner, his earlier confidence shrinking by the minute. Until now, he had believed his SIPs and mutual fund portfolio were putting him on the right path. But as the evening ended, doubt crept in. Was he doing something wrong? Why wasn’t his money growing as fast as others?
The FOMO trap
What Naman was experiencing was nothing but FOMO, or the fear of missing out.
In investing, FOMO can be toxic. It makes us compare our steady, goal-driven financial journey with someone else’s highlights reel.
The human brain is wired with behavioural biases that amplify this feeling.
- Herd mentality: Following what everyone else is doing, without asking if we understand the asset or security we want to invest in or whether it will help us achieve our financial goals.
- Anchoring bias: Relying on others’ stories on investing success and using them as the yardstick to measure our own portfolio’s performance.
- Recency bias: Basing our investing decisions on the latest fad or ‘red-hot’ stock or fund and believing that the rally will continue in future as well.
- Overconfidence bias: Overconfidence bias is when investors believe they’re smarter, luckier or more skilled at picking stocks and timing the market than they really are. This typically happens when investors buy one or more stocks that do well, and they assume they know the market better than anyone else.
Suggested read: Know your self (KYS)
The problem is, FOMO rarely benefits investors. By the time most people jump onto a ‘hot’ stock or asset, the big gains are gone. And when the cycle turns, as it always does, it’s usually the latecomers who face the steepest losses.
What you should do instead
- Focus on your financial goals: The point of investing isn’t to beat your friend’s portfolio. It’s to fund your goals, whether that’s buying a home, retiring early or paying for your child’s education.
- Evaluate with perspective: Before switching or exiting a fund, check if the underperformance is recent or consistent over a nearly three-year period. If it is the latter, then exiting the fund makes sense. But one bad year doesn’t make a bad fund.
- Stay disciplined: SIPs exist for a reason. They keep you invested regardless of the market mood and instil discipline, something that is more powerful than chasing headlines.
- Review and rebalance: Check your portfolio, ideally once a year and rebalance the asset allocation, if need be.
- Ignore the noise: Most people talk about their winners, not their losers. For every Rohan with a stock that doubled, there’s probably a silent flop he won’t mention.
The final word
Naman’s SIPs may not be doubling his money right now, but over time, they can create the kind of financial freedom that no reunion brag can match, all thanks to the power of compounding. Right now, it may seem that Naman’s wealth is not growing and that SIPs are a scam, but over a period of 10, 15 or 20 years, these SIPs would multiply his wealth exponentially.
So, the next time you feel the itch of FOMO after hearing about a friend’s ‘big win’, pause. Remind yourself that investing isn’t a race against others, it’s a journey towards your own goals. Because when it comes to money, FOMO isn’t just unhelpful, it’s your worst enemy.
Cut the noise, stay on track
Don’t let FOMO throw you off track. What you need is clarity, not noise. With Value Research Fund Advisor, get handpicked fund recommendations and model portfolios that keep your wealth journey steady, so that you don’t lose track of your financial goals.
Subscribe to Fund Advisor today
Also read: 'FOMO finance': When investing becomes performative
This article was originally published on September 04, 2025.
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