Recently, global financial markets have been fluctuating like a rollercoaster due to various factors, including the U.S.-Iran war and earnings announcements from AI and semiconductor companies. Korea’s stock market has shown the highest volatility compared to other major countries, even leading to the popularization of the term “Roller-KOSPI.” In March alone, the high-to-low volatility of the KOSPI reached 22.6%, which was 5.8 percentage points higher than that of Bitcoin during the same period. Furthermore, sidecars—emergency safety measures that temporarily halt program trading during sharp market fluctuations—were activated seven times during March. One of the key reasons for this instability is the “Investment FOMO syndrome” prevalent among Korean individual investors.
FOMO stands for “Fear Of Missing Out,” originally referring to the anxiety of feeling left behind by a trend. This expression is used in various contexts in daily life. Recently in Korea, it has been used to describe the jealousy or fear felt by those who haven’t invested as they see the rapid surges in the domestic stock market and the subsequent gains made by others.
There are several reasons why FOMO syndrome is particularly widespread among Korean individual investors. Looking at the structure of the Korean financial market, the proportion of retail investors is high compared to other countries. Although foreign and institutional investors are not entirely free from herd mentality, individual investors react much more sensitively to emotions, meaning this collective anxiety can significantly impact the market. Social media has accelerated this trend, as posts sharing experiences of high short-term investment returns spread rapidly.
Additionally, as prices, including real estate, have soared in recent years, a perception has grown among the Korean younger generation that it is impossible to afford a home simply by saving labor income. As the gap widens between those who have grown their wealth through investment and those who haven’t, financial investment—once seen as just one option for wealth management—is increasingly viewed as a mandatory choice for survival to prevent the depreciation of asset value. HUR Joon-young, an economics professor at Sogang University, said, “With housing prices in the Seoul metropolitan area so high and growing anxiety about falling behind financially, stock investing has become almost like a cultural phenomenon.”
When it comes to investing, FOMO syndrome often drives individual investors toward dangerous behavior. If the motivation to invest is driven by haste rather than conviction, trading cycles tend to shorten, and investors are likely to choose high-risk assets such as inverse ETFs, leveraged products, or cryptocurrencies. When losses occur in these investments, it can lead to extreme feelings of depression. In fact, FOMO-driven investments rarely perform well. According to a study from the global finance journal Finance Research Letters in 2025, a 10% increase in the FOMO index correlates with a decrease in average monthly stock returns of up to 2%. In other words, impulsive investing caused by FOMO syndrome is highly likely to trigger a continuous downward cycle.
Furthermore, in the long term, the spread of FOMO syndrome undermines market health and growth potential while weakening trust in government policies. Capital driven by FOMO syndrome repeatedly flows into and out of the market in large volumes, creating significant volatility. As a result, long-term investors who follow their own rational criteria can be crowded out. Moreover, as investments based on short-term market trends become more common than those based on objective indicators such as corporate performance or growth potential, capital allocation becomes less efficient. If this phenomenon continues over time, government policies may fail to achieve anything beyond causing fluctuations in specific stocks, reducing their effectiveness and credibility.
The investment FOMO syndrome is not only a hurdle that individual investors must overcome for healthy investing but also a structural issue that needs to be addressed. Experts advise individual investors to look beyond short-term fluctuations and instead establish their own investment rules based on objective economic indicators. They also point out that policies should be established to mitigate the anxieties of individual investors and create a financial environment where long-term investing is considered more attractive.
