FOMO Phenomenon Resurfaces in the Stock Market: What Does It Mean for Investors?

The phenomenon of FOMO (Fear of Missing Out)—the fear of missing potential gains—has once again emerged among retail investors as blue-chip stocks surge on the Indonesia Stock Exchange (IDX). This psychological urge to jump into rising stocks often turns into a trap that ends in losses.

What Is FOMO and Why Is It Risky?

According to research published in the Journal of Behavioral Finance, FOMO is an emotional response that drives individuals to make investment decisions without thorough analysis, simply because others appear to be making significant profits. In the stock market, this behavior typically surfaces when prices soar within a short period.

"FOMO can cloud an investor’s rational judgment. Many enter positions at peak prices solely because they fear missing out on opportunities," the Indonesian Financial Services Authority (OJK) explained in its 2024 market education program.

Tech Stock Rally and the FOMO Wave

Since early 2025, technology sector stocks listed on the IDX have recorded sharp gains, with some issuers skyrocketing more than 100% in just six months. IDX data also shows that daily trading volume has increased by 25%, alongside a surge in the number of new retail investor accounts.

Why Do Investors Fall Into the FOMO Trap?

• Social Media Influence – Stock discussion groups on Telegram and X (formerly Twitter) accelerate market euphoria.

• Confirmation Bias – Investors tend to seek information that supports their decision while ignoring risks.

• Fear of Regret – The anxiety of missing out when others are making large profits.

A Harvard Business Review study emphasizes that impulsive decisions driven by FOMO often lead to loss aversion, where losses feel far more painful than potential gains.

 

Five Ways to Overcome FOMO During a Market Rally

1. Set an Investment Plan Before Entering the Market
   Define a trading plan with profit targets, risk limits (stop-loss), and investment horizons.

2. Focus on Fundamental and Technical Analysis
   Base your decisions on financial statements, fair valuation metrics (such as P/E ratios), and technical trends—not rumors.

3. Adopt a Dollar-Cost Averaging (DCA) Strategy
   Buy shares gradually to reduce the risk of entering at peak prices.

4. Limit Social Media Influence
   Avoid blindly following “trading signals” without verification. Rely on official sources such as IDX and OJK.

5. Strictly Apply Stop-Loss Rules
   Set a maximum loss limit (e.g., 5–10%) to avoid significant drawdowns when prices reverse.