Foreword by Clare Flynn Levy

Clare Flynn Levy, CEO & Founder Essentia Analytics

Clare Flynn Levy is CEO & founder of Essentia Analytics. Prior to setting up Essentia, she spent 10 years as a fund manager, in both active equity (running over $1bn of pension funds for Deutsche Asset Management), and hedge (as founder and CIO of Avocet Capital Management, a specialist tech fund manager).

The coronavirus pandemic is obviously a major health event on a global scale. But it also raises issues about how we respond and manage ourselves as individuals.

This is especially important in asset management, where good decisions are what we’re paid for, and the responsibilities we have to shareholders and investors are enormous. Resilience has never been more important.

We asked seven of our top performance coaching partners – who specialize in working with portfolio managers, traders, and investment leaders – for their top tips for building and maintaining resilience during these highly uncertain times.

I’ve been observing a very high level of resilience among Essentia’s portfolio manager clients: they are sticking to their investment processes and documenting their thought processes, as a matter of routine. But the tips below are useful to us all, regardless of how keenly we’re feeling the pressure.

Picture of Denise Shull, investment performance coach

Denise Shull
Investment performance coach & author
The ReThink Group

“BE STILL”

  • The human brain is a prediction machine. Our subconscious detects aspects of situations as if they were jigsaw puzzles. As events unfold, we generate semi-conscious probabilities and confidence levels in the implications of those possibilities. Right now, we’ve got a puzzle with pieces from three or four different boxes.
  • With this, there is always the temptation to act. Doing something assuages the anxiety of being unsure which piece fits where. For a moment, we feel better. That is until we just can’t find the piece after next.
  • So what can you do? I advocate stepping back. Step back and be still for many more moments than you normally would be.
  • Resist the temptation to act in what is really just a salve for feeling unsettled. Find what you are afraid of. Write it down. Yes, write down your list of “what is the worst that can happen?” Talk about it with a good listener. Then ask yourself what do you believe? We all too often forget that Markowitz said step one in asset allocation is knowing what you believe.

Picture of Andrew Menaker Phd - Investor Coach

Andrew Menaker Ph.D.
Clinical psychologist and investment performance coach
andrewmenaker.com

“A MINDSET OF GRATITUDE”

  • An environment of extreme uncertainty, high volatility, and increased news flow requires a higher degree of resilience to perform well.
  • An abundance of research shows that a mindset of gratitude significantly contributes to psychological resilience, and even physical health.
  • Gratitude is different to positive thinking. Positive thinking may be needed for goals, but it takes more than positive thinking to develop resilience in the face of extreme uncertainty.
  • Gratitude is grounded in reality, whereas, positive thinking is about what may or may not happen. Hope may be a good strategy for life; but for professional market participants hope is not an edge.
  • It may not be easy, but training your mind on aspects of life that you appreciate or are thankful for is an effective strategy to improve resilience.
  • Developing and maintaining resilience through gratitude is a powerful antidote for FOMO, and very helpful in risk management.
  • Develop a mindset of gratitude and you will gain a huge psychological edge for making decisions in highly uncertain environments.

Picture of Jane Coffey, Investor Coach

Jane Coffey
Investor coach and Essentia Insight Partner

“USE A JOURNAL TO GET PERSPECTIVE”

  • Journaling is an effective tool for gaining perspective and distance from more heightened feelings related to professional and personal performance. Reactions can seem unique and powerful in the moment but regular journaling and review can reveal patterns you may not be aware of. This kind of self-awareness can help you to avoid knee-jerk responses and build more resilience to stress.
  • Try to journal every day but I recommend devoting only a small amount of time to it when starting – eg 15 minutes. This will make it more likely you continue the activity over the following days and build it into a sustainable habit (at which point you can more confidently extend your journaling as you wish).
  • An extension/alternate form of journaling is to set a daily “worry window” where you write down a list of your worries. If you start dwelling on them at other times, tell yourself you can revisit them in your worry window and so move on with your day.

Picture of Nicholas Beecroft - Investment and Leadership Coach

Nicholas Beecroft
Leadership coach, military psychiatrist and medical doctor
nicholasbeecroft.com

“TRUST YOUR INNER COMPASS”

  • COVID-19 is a catalyst that will change the way we live and work but which will also lead many people to act out of fear.
  • Know that you are evolved to survive and thrive navigating with your inner map and compass guided by your purpose, vision, interests and values. To this end, your emotions and physiological state offer valuable information that isn’t in your Excel model.
  • Resist the pressure to make a rushed decision – instead sleep on it, listen to music, be with other people or move your body. Our brain, heart and gut all synthesize complex, multidimensional information and that happens best when we get our rational mind out of the way and let it tick over in the background.
  • Another tactic is to add a controlled amount of emotional intensity. You can simulate this by taking steps in the direction of a decision – for example, make a small investment or sell a few shares and see how it feels. That emotional or physical reaction is something that’s actually very useful to you; you can learn to understand and use it.

Picture of Steve Goldstein - Investment and trading coach

Steven Goldstein
Investor and trader performance coach
Alpha R Cubed

“BE PRESENT”

  • Resilience can be thought of a mental suit of armor. However I would go further than that and say it is also an offensive tool enabling one to more effectively play attack as well as defence.
  • At the core of resilience is remaining present. ‘Being Present’ is defined as being ‘Energetically Available and Fluidly Responsive’,
  • Another element of ’being present’ is better ‘situational awareness’: The more present one is the more one is able to exercise rational judgement in the moment, to avoid knee-jerk emotional judgements, to step back, step out and see the big picture, the whole matrix, and yet also see the detail too.
  • Developing your presence is a skill developed over time, however in the short-term developing an effective mindfulness practice can give an instant hit. Take regular breaks in the day to reset, refresh and refocus, to calm the mind, to establish where you are, how you are, and what you need to do.

Picture of Ken Celiano - Investment Coach - Essentia Analytics

Ken Celiano Psy.D.
Clinical psychologist and investment performance coach
Even Keel Trading

“SEE, FEEL, TRUST”

  • Cultivating resilience is a necessary risk management responsibility, especially during epic market volatility periods like that triggered by the COVID-19 pandemic.
  • One strategy I recommend is rooted in what I call Internal Technical Analysis and helps a trader to See, Feel, and Trust (SFT) their decisions more confidently. This blends mind & body awareness to help the investment decision-maker rise up, rather than sink under the pressure of possibility.
  • SFT incorporates heart rate variability (HRV) monitoring several times per day to see how it is impacting current emotional levels. Comparisons to baseline readings taken during times of stability helps gauge if they’re in an optimal performance state.
  • In addition, the simple art of regulating your breathing and “facing what is” by documenting your experience and feelings can also help to downshift a hyper-aroused body (autonomic nervous system), allowing access to a more poised and resilient state of mind for proportionate decision-making.
  • Traders can also use an electrical tool called Alpha Stim when they need more support to offset heightened reactivity levels.

Picture of Louise Chester, Investment Decision Coaching Partner

Louise Chester
Performance Coach and Founder of Mindfulness at Work
Mindfulness at Work

“PRESENCE AND CONNECTIVITY = A RESILIENT MIND”

  • At times of physical distancing, it is all the more important to connect to ourselves and others with a warm or kindly presence. This not only releases the feel-good hormone oxytocin into our body, but enables a calm and clear mind that can focus on the right things.
  • Pause and get present with your own physical experience. Turn off distracting notifications, put your phone away, and check in – How are you feeling right now? Being honest and open allows for an expansive mind that is less reactive and can better see opportunities and solutions.
  • “Teflon & Velcro” – This refers to the brain’s negativity bias whereby our minds are Teflon for positive thoughts but Velcro for negative ones. We are hard-wired to ruminate on worst-case scenarios, and our bodies experience the stress hormones associated with them even though they aren’t real. Stop and ask yourself – Is this real for me right now? If not, see if you can place your attention on how things actually are in this moment and – as much as possible – focus on the positives. It’s not easy but as you become aware of this habitual behavior, you’ll realise that you have the choice to place your attention where you choose.
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