From mid-July to today’s close, the Ibovespa has appreciated by more than 17%. When we look at this performance, sentiment arises in most investors. This feeling is internationally known by its acronym in English, FOMO. I explain below what this symptom is and what you should do.
The acronym FOMO stands for Fear Of Missing Out (fear of being out). This symptom occurs because of our natural fear of missing or missing something good.
You have to be very careful not to get carried away by short-term optimism.
Valuations like this occur more often than we might think. Mainly, in markets that have suffered a strong devaluation recently and are surprised with better-than-expected data.
So, wait for the next chance. Do not attempt to get on the train when its motion may be close to stopping or reversing.
Seeing a strong rally, we believe that the recent move should repeat itself and, for fear of losing, we want to jump in at any price.
It is necessary to consider where the market price is and the probability that it will repeat itself looking forward.
Yes, although unlikely, it is possible that the Ibovespa will rise another 15% before the end of the year.
This would mean the index reaches almost 130 thousand points.
However, let’s face it, it seems unlikely that, with all the national and international uncertainties and the high interest rate, our stock market will reach the historic high reached in June 2021. At least, it seems unlikely that this movement will be a continuous rise no negative reversals like the one we already saw in the first half.
So, if you are suffering from FOMO, remember that being in the CDI today will already provide a return close to or even greater than 13% in the next 12 months. Thus, investing in fixed income would be almost like winning the stock market rise that one is afraid of losing, only with greater certainty.
Michael Viriato is an investment advisor and founding partner of Investor’s House
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I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
