Fear of missing out may have contributed to the fact that the German stock index (Dax) hit a new high for the year this week with relatively weak sales.
What role do TINA and FOMO, the two major drivers of stock prices in recent years, play right now? TINA (No Alternative) has now receded into the background. After years of not being an alternative to stocks for many investors due to the lack of interest, bonds are back in the game a long time ago.
On the other hand, FOMO (fear of missing out) seems to be very recent again: many investors are afraid of missing out on the new stock rally once the banking crisis subsides.
This fear usually affects professionals even more than private investors. Because asset managers acknowledge time and time again that their clients tend to overlook lower prices more than missed opportunities to rise. When prices crash, it batters most investors, and as an investor you can excuse yourself by saying that others haven’t been smarter either. On the other hand, if you miss height, it looks like you missed evolution.
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