Measuring FOMO

I really like the work of Yosef Bonaparte at the University of Colorado, because he tends to come up with practical ideas that are easy to implement and help practitioners like me. With his recent Global FOMO paper, he did it again.

FOMO (Fear Of Missing Out, for the uninitiated) has been talked about in the investment world for more than a decade now as part of the explanation why US tech stocks, cryptocurrencies and meme stocks have been doing what they are doing. So, Bonaparte decided to design a simple indicator that aims to measure global FOMO and see if that can forecast or at least explain stock market behaviour.

To construct his global FOMO index, he simply went to Google Trends and searched for six terms:

• FOMO

• Buy stocks

• Get rich quick

• Missed out

• Trending now

• Bitcoin price

Then he simply added the six results up into one signal and tested if that was able to forecast stock markets.

Global FOMO

Source: Bonaparte (2025), Google Trends

He found that times of high FOMO are followed by low equity market returns, in line with what you would expect. When people are chasing returns for fear of missing out, they are buying stocks not because they make sense fundamentally, but because they are trending now or because they have had large returns in the recent past.

The effect size is not too big, though. A 20-point increase in the global FOMO index leads on average to a one percentage point decline in equity market returns over the next 12 months. But at least it is something and we now have a decent way of measuring FOMO in the market.