Behavioral finance research shows that human psychology influences financial markets. Fear of missing out (FOMO) drives speculative surges and market bubbles. Yosef Bonaparte introduces the Global FOMO Index to measure FOMO using Google search data. The index reveals an upward trend, peaking in 2025 with bitcoin hitting $100,000. FOMO leads to lower returns, reduced volatility, and weaker risk-adjusted returns. FOMO’s impact is stronger in democratic nations due to media influence. Investors should use FOMO as a contrarian indicator, question the herd, focus on risk-adjusted returns, be aware of their environment, and use the Global FOMO Index as a sentiment indicator. FOMO is a measurable psychological force with real financial consequences, influencing market dynamics.

Read more at Morningstar: FOMO Can Lead to Lower Returns. Don’t Fall For It