At the 2016 summer Olympics in Rio de Janeiro, South Africa’s Chad Le Clos challenged Michael Phelps for the gold in the 200-meter butterfly. A famous image emerged from that event: Throughout the semifinal, Le Clos repeatedly looked over at Phelps as he struggled to keep up. Meanwhile, Phelps just kept looking forward. The result: Phelps ultimately won the gold, while Le Clos trailed in fourth place.

There’s a parallel, I think, between what we saw in that race and a lot of what we see in the investment world. Why do people pile into speculative investments like meme stocks, dogecoin, SPACs or NFTs? One explanation is so-called FOMO—the fear of missing out. When we see friends and neighbors making gains—like Le Clos seeing Phelps take home yet another gold medal—it can be hard to ignore.

FOMO is a real phenomenon. But there may be another reason why investors are drawn to popular investments.

In an excerpt from their new book, Like, authors Martin Reeves and Bob Goodson explain why “like” buttons on social media are so powerful. Human beings, they write, are observant, and we try to learn from one another’s experiences. This is especially true when we encounter people who seem to be traveling the same path. “When we observe others who are similar to us, we have higher confidence that their experiences are relevant to our own journey through life.”

This makes sense. If a friend or coworker has figured something out, why reinvent the wheel when we could instead piggyback on what they’ve learned?

Through this lens, some of the seemingly irrational behavior we see in investment markets may begin to make more sense. Those who appear to be mindlessly jumping on the bandwagon of a popular investment, in other words, might actually be making an intelligent move. They’re assuming that others have done the research on this investment.

Unfortunately, there’s a fly in the ointment, which is that Wall Street is a step ahead of us. Marketers know how we think. They know that people are susceptible to FOMO and that we will tend to mimic our peers, so they use these powerful effects to sell us on the investments that, at any given time, seem to be the most popular.

If your inbox looks anything like mine, you know what I mean. This year, with gold having gained 30%, sales pitches for precious metals have been piling up. The investment industry is very good at selling the flavor of the month.

How can you turn down the volume on these sorts of things? Here are some suggestions.

First, it helps to recognize that, when it comes to investing, there is always more than one road to success. Just because someone else is making money with a particular strategy, that doesn’t mean we need to be doing the same thing. Try hard, in other words, to be like Michael Phelps, looking forward. Don’t worry what’s happening in the next lane, or anywhere else.

More to the point, if your strategy fits your goals, then there really is no need to be doing anything else. Author Mike Piper illustrated this idea in a recent article. Imagine, Piper says, that you’re on a vacation somewhere and enjoying yourself. That would be terrific—except that it’s probably also true that there might be another vacation you could have taken that you would’ve enjoyed more. Many others, in fact.

That’s always going to be a reality, he says. In building a portfolio, “no matter what you pick, there’s going to be countless other options that would have been better.”

But, Piper says, “as long as your original decision was reasonably well informed, it’s not helpful to spend a bunch of time looking at other allocations, other mutual funds, or other individual stocks that you could have selected instead.” Not only could that lead to regret, Piper says, but it could lead to performance chasing.

That brings us to another key point. Because Wall Street marketers like to talk about what’s popular, there’s the danger that the investments they’re promoting may be the ones that are near peak valuations. So almost by definition, if Wall Street is trying to sell you a fund, that may be the one to avoid, or at least the time to avoid it.

This risk isn’t just theoretical; Jeffrey Ptak, an analyst at Morningstar, has quantified it. Earlier this year, he looked at investors’ results in thematic funds—so called “because they tend to tap into a trend that’s captured the imagination or entered the discourse somehow.”

The results were clear. Over a recent three-year period, “the average dollar invested in thematic funds lost around 7% per year.” Over that same period, the S&P 500 gained 11% per year.

Ptak’s conclusion: “By the time a thematic fund reaches investors’ attention, it might already have been picked over by other investors who had already tapped into the theme. That can leave thematic fund investors holding the bag―that is, an overvalued basket of stocks that courts hefty price risk.”

To be sure, this doesn’t mean you should reflexively avoid everything Wall Street promotes. But caution might be warranted.

In investing, it’s also important to keep in mind both sides of the risk-return equation. In general, risk and return go together, but marketers don’t always go out of their way to point this out. That’s another reason to follow the Michael Phelps model. There might be other strategies out there that’ll deliver higher returns, but that doesn’t mean those strategies are right for you. Consider Bill Gates, for example.

He’s 69 years old. If you didn’t know who he was, he might look like any other 69-year-old. But of course his investment strategy shouldn’t look like anyone else’s. The idea, in other words: Even when you think that what someone else is doing might be relevant, the reality is we often know little about others’ circumstances.

A recent analysis in The Wall Street Journal can also help us turn down the volume on Wall Street marketing. The article described the talent war among hedge funds for top-tier stock pickers. In some cases, funds are offering pay packages north of $100 million to lure top talent away from competitors.

What this tells us is that the number of investors capable of beating the market in any meaningful way is very small. Yes, they exist, and they may be worth paying for, but they aren’t easy to find. And even when they do exist, their funds typically aren’t open to individual investors. So when we hear about outsized success stories, we should recognize them as the outliers that they are.

For most investors, most of the time, the data tell us that simplicity and low cost are the way to go. Keeping that in mind may be the best way to tune out whatever might be happening in the next lane.​