Over the past few years, financial markets have remained highly active, with more individuals entering the world of investing and trading. The rise of commission-free trading, digital brokerages, and AI-driven investment tools has made market participation more accessible than ever. In 2023 alone, global retail trading volumes surged, fueled by macroeconomic uncertainties, technological advancements, and a growing appetite for alternative assets.
Singapore has also seen a sustained increase in market participation. The Singapore Exchange (SGX) has continued to evolve, expanding its suite of products and strengthening its position as a leading investment hub in Asia. As of 2024, SGX reported steady growth in trading activity, supported by investor interest in ETFs, REITs, and sustainable finance instruments.
However, being active in the financial markets isn’t just about deploying capital into trending asset classes. While access to financial markets has never been easier, uninformed speculation remains a major risk. Simply chasing the latest market hype without proper risk management can lead to significant losses—something many investors learned the hard way in recent years.
#1 The Fear of Missing Out (FOMO) in Investing: Is It Still Driving Market Hype In 2025?
Whether it’s chasing the latest Taylor Swift concert tickets, scrambling to buy the newest McDonald’s Hello Kitty collaboration, or putting down a hefty deposit for a choice unit in a newly launched condominium, the fear of missing out (FOMO) can push us to spend more than we otherwise would. This same psychological trigger plays out in the financial markets—often with serious consequences.
We’ve seen countless examples in recent years, from the meme stock craze of 2021 (GameStop, AMC) to the rise and fall of NFTs and the relentless hype cycles around cryptocurrencies and AI stocks. In 2024, the trend continued, with speculative interest shifting towards everything from metaverse-related ETFs to tokenised real-world assets.
Today, financial markets are more connected than ever to social media. On Instagram, YouTube, and TikTok, influencers churn out investing content daily, often glamorising short-term trading and high-risk strategies. Even billionaires like Elon Musk continue to stir market reactions with their tweets—whether it’s about Tesla stock sales, Dogecoin, or the latest AI venture.
Personally, I believe that growing interest in finance is a good thing. More people taking actionable steps to generate returns and build wealth is something to be encouraged. But just as you wouldn’t attempt a deadlift in the gym without learning the proper technique—unless you want to injure yourself—you shouldn’t dive into trading or investing without understanding the risks involved.
#2 The Thrill Of A Good Deal—In Shopping & Investing
Everyone loves the feeling of scoring a great deal. Whether it’s snagging a bargain on 11.11, getting a one-for-one happy hour special, or witnessing a football club pull off a genius free transfer (like PSG signing Lionel Messi back in the day), there’s something deeply satisfying about paying far less than expected for something valuable.
The same logic applies to investing. There’s a thrill in buying into an undervalued stock before it surges, investing in a company that gets taken private at a premium, or securing long-term winners at seemingly bargain prices—think Tesla at $100, Bitcoin at $1,000, or DBS at $18.
But no matter how tempting a deal may seem, it’s never wise to stretch beyond your budget. This rule doesn’t just apply to shopping—it’s equally crucial in the financial markets.
When we invest or trade, we need to set a financial “budget.” This isn’t just about how much we’re willing to invest, but also how much we can afford to lose without jeopardizing our financial well-being. No stock, crypto, or investment opportunity is a sure bet, no matter how promising it looks. Diversification remains key—no matter how confident we are in a single trade, going all-in on one or two positions is a risk few can afford to take.
#3 Why Emotions and Investing Don’t Mix
Our emotions serve us well in many areas of life. Feeling fear when a pack of stray dogs or wild boars approaches us? That’s our survival instincts kicking in. Running out of a burning building without hesitation? That’s our emotions guiding us toward safety. In these situations, trusting our instincts is a good thing.
However, in the financial markets, emotions can be our worst enemy. One key trait that separates seasoned traders and investors from beginners is their ability to remain unemotional when making financial decisions. While no one enjoys losing money, experienced investors understand that both gains and losses are part of the game. What matters isn’t avoiding losses altogether—it’s ensuring that, over time, our winning trades outweigh our losing ones, and doing so with consistency.
One approach I advocate for keeping emotions in check is algorithmic trading. This involves using computer programs to execute trades based on predefined strategies, removing impulsive decision-making from the process.
While algo trading might seem like a recent innovation for many retail investors, it has been a staple in institutional trading for years. In 2025, the use of AI-driven trading models and machine learning-based strategies continues to grow, making sophisticated tools more accessible to retail traders than ever before. Whether through simple rule-based automation or advanced quantitative models, leveraging algorithms can help investors stick to their strategies without emotional interference.
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