There’s been this sentiment the past few years that if you want the “best” return you should invest in big US tech stocks because those are the stocks that go up the fastest. Whenever I heard someone share that sentiment, I wanted to tear my hair out because that logic has a HUGE problem. Those are the stocks that HAVE went up the fastest looking backwards. We DON’T KNOW which stocks are going to go up the fastest in the future. And going forward is what counts.

This is committing the sin of “chasing past performance”. If you go buy what recently did well, you’re missing out on what’s ABOUT to do well. Performance chasers may be experiencing the beginning of that reckoning.

NOW I’m finally hearing from people who really want to invest in international stocks because they’re doing so well. But guess what. YOU’RE TOO LATE. You’re still chasing past performance and you’ve already missed out on the 16.3% outperformance they’ve enjoyed the first 2.5 months of this year. In order to own the next hot thing, you need to buy it BEFORE it goes up, when it’s still unpopular.

I have always invested globally in stocks AND bonds (bonds are another much maligned asset class as of late. They will likely have their decade of outperformance coming up too). It’s not sexy and not popular, but I rest easy knowing that WHICHEVER asset class has it’s big day, I’ll own a piece of all of it. I’m also sure I’ll beat the performance chasers over time.

If you’re someone who has been chasing performance investing in large tech stocks you’re learning an expensive lesson right now. You now have a tough decision to make. Do you keep chasing past performance and jump over to international? Or stay the course hoping the big tech stocks will continue their forever outperformance. I can’t possibly know which is right (no one does) which is why I always invest in globally diverse index funds and stay the course no matter how unpopular.

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.

-Jeremy

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By: Gabriela Gonzalez
Title: Investing FOMO will wreck your portfolio-here’s how to fix it
Sourced From: www.personalfinanceclub.com/investing-fomo-will-wreck-your-portfolio-heres-how-to-fix-it/
Published Date: Tue, 25 Mar 2025 22:01:52 +0000

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