Buy now! Shop! Click here! Biggest sale of the season! You don’t want to miss it! Last chance!
Black Friday is upon us, and with it comes the fabricated urgency to buy, buy, buy! Consumers get hit from every angle: their social media feeds, digital ads, emails, billboards, even our good old fashioned mailbox. We Americans are all too familiar with this anxious expectation to spend big to save big this time of year. But that fear of missing out and compulsion to do something (anything!) with our money isn’t merely reserved for Black Friday sales and Cyber Monday deals. FOMO, in the stock market at least, can creep up on us 365 days a year.
Whether it’s an announcement that the S&P 500 is at an all-time high or that it had its biggest single-day drop in years, the stock market and the headlines that cover it have a way of imprinting anxiety, urgency, and fear in current and would-be investors year round.
For current investors, the fear of losing it all in a downturn is often sensationalized by headlines and compounded by the herd mentality. One policy decision, or mere threat of a policy, is enough to make a subset of investors panic. Sell now! Last Chance! Get out while you can! And yet, historically, the market always recovers and panic sellers often miss out on the crucial rebound.
For would-be investors, market FOMO is most palpable, of course, when the market is doing great, as has been the case for the past three years. Maybe their fear of loss prevented them from investing, only for a different fear to take over. One that says if they don’t get in on the action now, they’ll regret it big time. Maybe forever. Don’t miss the biggest run of the year! Of the decade! Of the century! And yet, historically, there can be no ups without downs. Volatility is a feature, not a bug. It’s unavoidable.
The point is, investing is actually a lot like spending, especially during the holidays. As much as the market wants you to think you’re living in a once-in-a-lifetime bull run or your favorite brand needs you to believe they’re having their biggest sale ever, the truth is that bull runs and big sales happen all the time. Just like bear markets and high prices happen all the time.
The key to navigating Black Friday is the same as navigating the stock market: Intentionality matters. Don’t just buy to buy, because the aggressive ads told you to. And don’t just invest to invest, because the headlines are pressuring you to. Plans, budgets, and goals over anxiety, urgency, and fear. Intentional investing, like intentional shopping, can help shield you from emotional whipsaws wrought by outside noise. Why am I buying this stuff? What am I investing for? These — not, What could I be missing out on? — are the questions we should be asking ourselves. Not just for Black Friday, but every day of the year.