There are two things that act as worst enemies of investors. We all know them well.
FOMO (Fear of Missing Out) and The Sunk Cost Fallacy
When the price of crypto is moving up aggressively we tend to freak out and worry about missing the ride and do things like chase price higher or buy on any little pullback. Often times this bites us in the ass and we make a poor entry price.
Other times we hold onto something that we are up big on because it is ripping higher and any pullback is just a hiccup before things are sure to rip higher.
FOMO is a real mother$&*!
The Sunk Cost Fallacy
Just as FOMO can impact us in areas of live other than investing – you do and will have sunk costs in your life.
You will emotionally invest in people, time at a job and money on investments. The thing is, many times it will turn out to be a waste!
As people we are driven by two things:
• The Desire for Gain (hence FOMO)
• The Fear of Loss
Many psychological studies claim the fear of loss is two and a half times more intense than the desire for gain.
Think about that for a minute! We take the pain of loss more than twice as hard as we experience the joy of gain.
No wonder we don’t want to book a losing investment or get out of a crappy relationship. The sheer thought of locking that fact in is too much for most to digest.