Ask Doc Fear of missing out, or "FOMO," is a powerful driver in investing.
Even after years of assets soaring, a lot of folks only decide they want in on the action once they've grown tired of hearing about how much money their friends have made. So they recklessly dump whatever money they have into the markets – hoping for similar returns.
Think about all of the stories years ago of bitcoin millionaires... often computer nerds who'd bought in early when the currency was valued in the pennies. They'd tell everyone who'd listen that they should buy cryptos, too.
"Everyone Is Getting Hilariously Rich and You're Not," read a New York Times headline in early 2018. This was right when the bitcoin mania was heating up. FOMO was taking over, and speculators were piling in.
But all those crypto heads trying to turn their friends on to bitcoin were wasting their time...
While decent gains could still be made, bitcoin's life-changing, millionaire-minting rise was already over. Individual speculators moved bitcoin from an unknown oddity to a mainstream asset, but unless you were one of the first ones in, you probably aren't rolling in riches today.
As the NYT article demonstrates, the mass media has been obsessed with "retail investors" – in other words, regular people who are investing in stocks and other assets – for years now.
Admittedly, these folks do have some impact. The most infamous example was the rise of "meme stocks" in 2021. Retail investors drove the share prices of names like AMC Entertainment (AMC) and GameStop (GME) to ridiculous heights.
But the only reason they could do that was because those stocks had smallish market caps. When meme traders try to drive the price on something bigger, they fail. For instance, when they attempted to push the silver market up by buying the iShares Silver Trust (SLV), they managed only a small, short-lived blip on the chart.
At the end of the day, institutions still rule finance... Whether your investment account totals $10,000 or $10 million, you are the small fish. When someone is rushing to finish an institution's buy order before lunch, billions of dollars change hands in a matter of minutes.
That's the sort of activity that moves the markets – especially when it's a long-term pattern instead of a one-off transaction. Institutional investors have been responsible for megatrends that include the latest crypto surge... "alternative assets" like timberland and venture-capital funding... and, to some extent, even single-family homes.
The key to finding the megatrends is to get ahead of institutional investors. You don't want to buy what they are buying, but what they will be buying.
The latest FOMO trend is the boom in artificial intelligence ("AI"). Retail investors and institutional investors alike have already been buying up the biggest names in AI and AI-driven tech. And if you're still thinking of jumping in, my friend and colleague Dan Ferris has a warning for you...
According to Dan, the tech sector has been on an unsustainable run, and it's only a matter of time before it comes crashing back down to Earth. The cracks are already evident... In early September, AI tech darling Nvidia (NVDA) lost more market capitalization in a single day than any other stock in history. Dan believes this is just the beginning of a bigger correction.
The "smart money" on Wall Street is already moving to the next boom. And Dan says now is the time for average investors to get ahead of the surge.
Let's dig into the Q&A... As always, keep sending your comments, questions, and topic suggestions to [email protected]. My team and I really do read every e-mail.
Q: I have lately been reading a lot of conflicting information regarding tomatoes. Are they good for you or bad for you, particularly the skins and seeds? I thought you could offer a dispassionate appraisal. – P.H.
A: Thanks for your question, P.H.
Tomatoes are good for you because they're loaded with nutrients, including...
Vitamin C – Your body needs vitamin C to support your blood vessels, cartilage, and muscle. It's also essential in your body's production of collagen – a protein that provides structure to skin, helps blood clot, and strengthens bones.
As an antioxidant, vitamin C helps protect your cells from harmful free radicals, which can cause heart disease, cancer, and other major issues for your health.
Plus, it's a regulator of the immune system, helping protect you from things like the common cold and eye diseases.
Ligilactobacillus salivarius – This strain of gut bacteria helps maintain good oral health, control cholesterol levels, relieve allergy symptoms, and boost the overall immune system.
Lycopene – Found in fruits and vegetables, this phytochemical helps fight off free radicals that can damage your cells. It also plays an important role in protecting your DNA from damage – a problem that can lead to cancer-causing mutations.
A review published in the Journal of the National Cancer Institute found that higher levels of lycopene in a person's diet lowered their risk of lung, stomach, and prostate cancers.
About 80% of all lycopene that Americans eat is from tomatoes and tomato products. And overall, the tomato skin is what provides most of the valuable nutrients listed above. Even the seeds contain dietary fiber and amino acids.
Like you, we've heard some folks say that tomatoes are bad for you. The argument is that they contain alkaloids (a nitrogenous compound) and lectins (a protein). But the hazards of tomatoes are a myth... Except for certain people with gut issues or autoimmune diseases, who might experience some digestive upset, there's no evidence that anything in a tomato is harmful to humans when consumed in normal amounts.
So enjoy your tomatoes without fear, and take advantage of their health benefits.
What We're Reading...
- Did you miss it? Here's what to expect in the market this month.
- Something different: The elite college students who can't read books.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
October 11, 2024