What could possibly go wrong if your neighbor won the lottery?

A 2018 Philadelphia Fed study found that when someone wins the lottery, their neighbors often start spending more, borrowing more, and bankruptcies rise!   Turns out “keeping up with the Joneses” isn’t just a joke—it’s a financial hazard.

Ouch. You’d hope we’d be past this by now.

Yet Behavioral Investing shows this same lottery lunacy exists in the markets – when standout wins can entice us into the same trades – often with more enthusiasm than risk awareness.

Here’s what that looks like:

• Herd investing: “Everyone’s making money in this… I should too.”
• FOMO: You panic about missing the next stock run-up and ditch your plan.
• Recency bias: Something just worked, so you assume it’ll keep working.
• Performance chasing: You buy after the big jump, expecting more of the same.

People love to talk about their biggest stock winners—and they’ll even laugh about the time they took a financial faceplant on a trade. But they rarely mention the quiet, boring decisions in the middle – the behavioral investing that actually creates wealth: slow, steady, and intentional investing.

Schwab Asset Management sums it up nicely: herd mentality makes people follow the crowd, skip the research, and make costly moves—like buying high, selling low, and losing sight of the plan.

Stay the course,
Barbara
 
 
Jan18, 2026
 
Sources:
https://pekinhardy.com/keeping-up-with-the-joneses/
https://www.schwabassetmanagement.com/content/herd-mentality-bias

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