How to Avoid Investor FOMO?
The Fear of Missing Out (FOMO) can be intense, especially when you hear headlines about Nvidia becoming the largest public company in the world.
The Fear of Missing Out (FOMO) can be intense, especially when you hear headlines about Nvidia becoming the largest public company in the world. Nvidia stock was up more than 100% in 2023 and is up more than 100% again so far in 2024.¹ Investors feel anxious, wondering if they should buy Nvidia now or if it’s too late to profit. However, if you’re diversified, you likely already own it! And if you’re invested using Beanstox Plus, you may already own it in your personalized Wealth Builder portfolio. This highlights why diversification is crucial to a successful investment strategy. Owning a selection of diversified ETFs is an easy way to own many of the biggest successful stocks and avoid the fear of missing out on many “winners”. At Beanstox, we can do that for you.
As of June 18, 2024, Nvidia reached a market capitalization of $3.34 trillion, surpassing the value of Microsoft. Five years ago, it was the 60th largest S&P 500 stock, and ten years ago, it was the 294th. Diversification could help you avoid the pitfalls of FOMO as you could be part of the success stories as they unfold.²
With Beanstox, you can easily achieve diversification without the stress of managing individual stocks. Choose Beanstox Plus for access to a personalized portfolio of ETFs built by experts, based on your investment goals and risk profile.
The Power of Diversification
By maintaining a diversified portfolio, you could own shares of companies like Nvidia before and during their periods of substantial growth. This approach minimizes the stress of trying to time the market or chase yesterday’s winners. Let’s look at the returns of the 5 largest companies in the US over the last 10 years (as of June 18, 2024)³:
Nvidia (NVDA): 28,974%
Microsoft (MSFT): 1,159%
Apple (AAPL): 951%
Alphabet (GOOG): 540%
Amazon.com (AMZN): 993%
Now, you might think, “Great, I’ll just buy stock in the biggest companies,” but the thing is, they change over time! Just check out the 5 largest in June of 2000:
General Electric
Intel
Cisco Systems
Microsoft
Pfizer
As you can see, the biggest companies today weren’t always the leaders in the past. Diversification helps capture growth from emerging leaders and reduces the risk associated with betting on just a few stocks.⁴
Avoid the Stress, Embrace the Growth
Investing in diversified ETFs like those that track the S&P 500 allows you to capture growth across a full range of industries and companies. While others stress about when to buy or sell individual stocks, diversified investors usually benefit from the overall market’s upward trajectory over time. Beanstox makes this even easier with automated investing solutions tailored to your investment goals and risk profile.
Why Diversification Works
Incorporating diversification into your investment strategy not only reduces risk but also positions you to benefit from the growth of emerging and established companies alike. With a diversified portfolio, you can sit back and let the market work for you, avoiding the stress and pitfalls of trying to predict the next big winner.
Stay calm, stay diversified, and keep investing. Let others worry about the highs and lows of individual stocks. Your diversified portfolio can help ensure you’re in the game for the long haul, enjoying the fruits of potential market success.
Download the app today. It’s free with Beanstox Simple, giving you access to Stocks 500 and Power Savings. Want it all? Upgrade to Beanstox Plus for a personalized Wealth Builder portfolio and additional features.⁵
Disclosures:
Diversification is not a guarantee of profit or protection against loss.
1. YCharts. Nvidia Corp (NVDA) total return. Data as of 6/18/2024.
2. YCharts. S&P 500 Index constituents as of 6/18/2024.
3. YCharts. 10-year total return of top 5 S&P 500 constituents as measured by market capitalization.
4. Personal Finance Club.
5. Fees/Free: Free with Beanstox Simple. Learn About Pricing.
Get Started With Beanstox
Set yourself up for a better future, with the freedom and security that come from having a growing portfolio. Download Beanstox and set up your automated recurring deposits today!
