Nobody wants to be left behind, particularly as they watch their peers' portfolios climb.
It's that fear of missing out, says market coach Doug Hirschhorn, that can lead some investors to do some pretty stupid things.
For example, investors can over-trade in an attempt to keep up with everyone else. Equally bad, says Hirschhorn, they trade without a competitive edge.
And that's a no-no.
Video: Doug Hirschhorn, market coach, discusses how investors can fight the fear of missing out on the current rally.
So how can you make sure you're not missing out? First, establish a game plan and trade it. Know your edge on every trade. And make sure you shift your perspective from relative to absolute--instead of focusing on others, mind your own business, Hirschhorn says.
Finally, accept the fact that there will be times when you miss out. After all, even Warren Buffett has an off day.
Doug Hirschhorn is the chief executive officer of Edge Consulting, a firm specializing in “Peak Performance Coaching.” He holds a Ph.D. in Psychology with a specialization in sport psychology, and has offices in New York and South Florida. His client list includes elite athletes as well as many of the largest banks, hedge funds and financial institutions in the world. Doug is presently at work on his new book, Street Smarts (Putnam, 2010).
Have a question for Doug? You can reach him through his Web site, DrDoug.com
Disclaimer: Doug Hirschhorn's expertise is in the psychology of achieving peak performance. He is not a financial advisor and does not make trading or investment recommendations or provide trading or investment advice. He is an expert on the mental game. Although Doug Hirschhorn has a Ph.D. in Psychology with a specialization in sport psychology, he is not a licensed psychologist and does not provide therapeutic, clinical or counseling services.