Don’t Jump at Every Opportunity the Financial Whiz Kid Is Selling

Fads come and go in most industries. Just take a look at a photo of yourself from the 80s with the big hair and bike shorts and tell me otherwise! I’ve been in the financial services business long enough to see certain things that were popular at one point fade in the wind. That seems to always be the case in the investment industry. There will always be the new sexy opportunity, whether it’s gold, junk bonds, cryptocurrency, or God knows whatever comes next. 

Digital assets seem to be in vogue at the moment, and have gained traction over the past few years - crypto, NFTs, alt coins, stable coins, ext. It’s new and exciting, and people want to get in because of one of the oldest marketing tricks in the book, FOMO, fear of missing out. As human beings, we don’t like missing out, especially when it comes to money. We tend to make poor investment decisions when our emotions get in the way, and rational thought diminishes. We’re just wired to be really crappy investors. We tend to fear that we’re being left out because we heard about our neighbor’s kid who made a million dollars on the latest digital coin. Certain parts of our brain fire up when we experience fear or greed, real physiological responses that are hard-wired in us and have kept us alive as a species for millions of years. These response systems can save your life if you’re confronted by a grizzly bear and need a good fight or flight adrenaline shot to get away, but when it comes to investing, these adrenaline shots can be detrimental. It’s really hard to make sound long-term money decisions when your brain is activated in fight or flight mode or obsessing about what you’re missing out on when your buddy tells you about his recent crypto triumph at the water cooler.