Don’t Succumb to the Fear of Missing Out Lake Point Advisory Group

If you’ve followed markets or financial news, especially in the past few years, you may have come across the term “fear of missing out,” commonly abbreviated to FOMO. When markets keep going up, FOMO can start to creep in. It can start to feel like you’re leaving gains on the table by not rebalancing your portfolio to include the ultra-high growth assets that saw big jumps. The desire to get as much as you can from your assets is normal, but if you let it influence your decisions, you could end up risking more than you can afford. In the event of pullbacks, you may not have the time needed to benefit from a rebound.

The age-old saying, “past performance doesn’t indicate future results,” is all too true. Especially now, when we’ve seen the years of historic market gains seemingly come to an end, it comes as a reminder that markets don’t always go up, and the value of protection and safety in your retirement investments is of the utmost importance.

How To Avoid The Fear Of Missing Out

FOMO is a mindset that’s informed by emotion, so it’s important to keep your impulses in check and avoid jumping at a hot stock tip or rebalancing your portfolio to make a bet on an asset you don’t fully understand. Take the time to assess your risk tolerance and construct a plan to avoid letting FOMO dictate your investment strategy. It’s okay to have risk exposure in your portfolio; the question is around how much are you able to risk for the potential of large gains?

To mitigate the effects of FOMO on your retirement portfolio, make sure your portfolio is properly diversified based on your risk tolerance. Portfolio diversity can be a key to achieving a balance between growth and safety.

How Does Portfolio Diversity Work?

Essentially, portfolio diversity refers to a balance between high-risk and low-risk assets across sectors and asset classes. For example, a retiree may allocate a portion of their portfolio to assets to high-growth technology stocks, while another portion of their portfolio is allocated to consumer staples stocks that pay dividends. You may also want to diversify across asset classes such as real estate or bonds. The more you diversify, the more protected you become against a downturn in the market or in one sector. You also don’t have to choose one or the other, which makes it a good way to address FOMO, given that you can still allocate a portion of your portfolio to risk-tolerant assets.

There are plenty of ways to address FOMO, and it’s encouraged to talk about how to avoid it with a financial professional. We focus on working with you to understand your unique financial situation and goals and turn that into an actionable strategy that can help you achieve the retirement you want.

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Lake Point Advisory Group is a tradename. All services provided by Lake Point Advisory Group investment professionals are provided in their individual capacities as investment adviser representatives of Mercer Global Advisors Inc. (“Mercer Advisors”), an SEC-registered investment adviser principally located in Denver, Colorado, with various branch offices throughout the United States doing business under different tradenames ,including Lake Point Advisory Group.This material is provided for informational purposes and is not an offer to sell or a solicitation of an offer to buy an interest in any security or to engage in any investment strategy. Such an offer may only be made at the time a qualified offeree receives a confidential private offering memorandum or other appropriate disclosure. This report is intended as a summary; it does not purport to be complete. Information contained herein is believed to be accurate and/or derived from sources which we believe to be reliable; however we do not warrant the completeness or accuracy of such information. Opinions expressed herein do not necessarily reflect those of Lake Point or Mercer Advisors. You should not construe this presentation or any other communication received in connection with Lake Point as legal, accounting, tax, investment, or other advice. You should consult with your own counsel and advisors regarding such matters. Past performance is not necessarily indicative of future results. No representation is made that any investment will or is likely to achieve the same or similar results in the future. Investments cannot be made in an index. Alternative investments are subject to greater risks than those associated with traditional investments and are not suitable for all investors.