Freeze, don't take: why have big investors picked up FOGI - the fear of buying stocks?

Institutional investors have become more cautious, Allianz Global Investors analysts note in their survey. They call this pattern of behavior FOGI (fear of going in) by analogy with the better-known term FOMO (fear of missing out). What do market professionals fear and should retail investors follow their example?

FOGI translates as "fear of entering the market" - that is, buying assets. Apparently, this fear in recent months was exposed to institutional investors, who prefer to refrain from risk, analysts write Allianz Global Investors. They cite the recent volatility in the markets and the unpredictability of the Donald Trump administration's policies as the reason.

Reuters also wrote that big investors are being extra cautious this summer. Judging by the options market, traders are expecting a repeat of last August's volatility spikes, said Jerry Fowler, head of European equities strategy at UBS. The summer has been so loaded with potential market catalysts that not everyone will allow themselves to go on vacation, he said.

Private investors have also faced FOGI. Reuters wrote that during the April market collapse due to the trade war, investors, especially those of pre-retirement age, were "ringing off the phones" of their advisers trying to figure out what to do with their portfolios now. Most of them did not pull out of the market, but they did refuse to make new purchases for a while. Over time, however, this fear seems to have evaporated: in early July, the S&P 500 index of U.S. stocks reached a historic record, rising 26% from its April low.

The reason could be FOMO ("fear of missing out"), the opposite behavioral pattern to FOGI. The psychology of FOMO is well described in classic behavioral cycle models. After the capitulation phase, when participants exit assets en masse during a period of panic, comes a phase of cautious optimism and recovery. It is at this point that FOMO becomes particularly acute. When prices rise rapidly, the fear of missing out on growth is stronger than rational arguments.

The information background has a strong influence on investor behavior. In April 2025 - amid Trump's imposition of harsh duties against U.S. trading partners - Wall Street's fear level reached a five-year high, and a later announcement of a "pause" in the trade war gave the S&P 500 a daily gain of nearly 10% - the largest since 2008. The nervous backdrop reinforces the investor's desire to "not miss the rally," even if the risks haven't gone anywhere.

The Allianz Global Investors survey leaves the question of how investors will behave next open: will the current FOGI be replaced by a new round of FOMO if geopolitical tensions ease and markets stabilize?  

The company's analysts emphasize: historically, investing in U.S. stocks has always been rewarding, and the factors that have made America a successful business environment remain constant: they are typically high returns on capital for U.S. companies, leadership in artificial intelligence (AI), and favorable demographics. 

They recommend that investors focus on areas where opportunities clearly remain (technology and industrials) and diversify their portfolios by exiting U.S. sectors that do not justify the price premium over other markets. And they cite the example of European companies in cybersecurity, artificial intelligence, defense and defense technologies, which will benefit from the growth of budget spending in Europe.

This article was AI-translated and verified by a human editor