Experts Warn Against FOMO in All-Time High Market Investments

Investors are feeling the pressure as stock markets hit all-time highs, prompting fears of missing out on lucrative opportunities. With notable companies like Nvidia making headlines for soaring share prices, many individuals, particularly new investors, are eager to join the trend. However, experts caution that jumping into these high-flying stocks without careful consideration can be risky.

According to Ryan Gubic, a certified financial planner and founder of MRG Wealth Management, the excitement surrounding high-performing stocks often leads investors to overlook crucial questions about their motives for investing. “Many investors get caught in the hype,” he stated. He emphasized that stocks that have already risen significantly may not continue on that trajectory, potentially leading to losses.

Investing should be aligned with an individual’s financial journey, including their goals and time horizon. Gubic advises young investors to assess their knowledge and commitment to market analysis before making decisions. Consulting with a financial adviser can provide clarity on personal goals and risk tolerance, which are essential for developing a comprehensive financial plan.

The importance of informed decision-making cannot be overstated. Gubic warned that without proper research, stock picking can devolve into speculative betting. He posed the critical question, “Are you just chasing returns, or do you actually have a strategy and a process that you’re following?”

The current market environment also presents unique challenges. With stocks trading at peak levels, investors must consider the potential risks involved. Gubic suggested reflecting on how much they are willing to lose and how that loss could affect their financial future over various timeframes. “Be really truthful with yourself: Are you doing speculative gambling or are you doing systematic investing?” he asked.

Mia Karmelic, an executive financial consultant at IG Wealth Management, noted that while friends may share their investment successes, they often remain silent about their losses. “They don’t always talk about it when they’ve lost money,” she remarked. This lack of transparency can create an unrealistic picture of investing, particularly in volatile markets.

Despite recent trade-related fluctuations earlier in the year, the markets have rebounded and achieved new highs. “Pullbacks are normal and they happen each year,” Karmelic explained. She emphasized that investors should focus on long-term growth rather than getting caught up in short-term market movements.

Karmelic advocates for a diversified investment strategy, particularly for those with limited funds. “I suggest investing in a diversified portfolio — ETFs, mutual funds — rather than individual stocks when there isn’t a large amount of savings to be invested,” she stated. This approach helps mitigate risks while still allowing investors to participate in the market.

Young investors, who often start with smaller amounts of capital, may be tempted to take on higher risks in search of quick returns. “It’s really hard to diversify into an individual stock portfolio when there isn’t a substantial amount of money being invested,” Karmelic added. Instead, she recommends a consistent investment approach, allowing individuals to average into the market over time.

While investing in stocks at an all-time high is not inherently negative, Karmelic advises caution. “There’s certainly space for some of those stocks that are at all-time highs because chances are they can continue to hit new highs,” she said. Nevertheless, she stressed the importance of protecting one’s portfolio from significant volatility.

To manage risk effectively, Karmelic encourages building a diversified portfolio across various sectors and markets. “Investors will definitely feel the volatility more if they’re only exposed to three or four individual companies,” she noted. If an investor is set on purchasing a high-flying stock, it should represent only a small fraction of their overall portfolio. Gubic pointed out that for many clients, individual equity holdings typically account for around one to two percent of their total investments.

Investors are urged to remain vigilant and informed as they navigate a market characterized by both opportunity and risk. This report by The Canadian Press was first published on September 2, 2025.