Why does missing out cause pain?

1. From an evolutionary perspective, humans relied on group survival in ancient times, and sensitivity to group dynamics was an important guarantee of survival. In modern society, this instinct still exists, leading individuals to have a strong desire to participate in social activities to avoid being marginalized.

2. Psychological research shows that people are more sensitive to losses than to gains. Missing a good investment opportunity is seen as a 'loss'.

3. Need for belonging: According to self-determination theory, humans have three basic needs, one of which is the need for belonging. People want to connect with others, and the use of social media just meets this need. When individuals feel excluded, they experience FOMO to avoid disconnecting from others.

4. In an era of information overload, investors often compare themselves to others. When they see friends or colleagues profiting from an investment opportunity, they feel inadequate. This social comparison intensifies FOMO mentality.

Consequences of missing out:

1. It can lead to blindly following trends, ignoring fundamentals, disregarding common sense, and impulsively chasing prices.

2. After missing out, the FOMO not only causes intense changes within oneself, but the market can also experience a temporary craziness due to the emotion of missing out. The interaction between inner emotions and market reactions strengthens this, leading to almost a collapse of selection systems, near-collapse of position management, a sharp increase in risk appetite, extreme demands for profits, and extreme difficulty in stopping losses. Significant losses follow.

3. After missing out, FOMO leads to reckless investments and losses. Big opportunities often come with big pitfalls.

4. In investing, missing out itself does not have any adverse consequences. However, the FOMO after missing out is generally only harmful.

Do you understand?