Here we go once again. The economy, Ebola, Isis, an overdue market correction … you name it, but investors and many top advisors are again going through gloom-and doom predictions and fears. If the market falls precipitously, does this mean that advisor stress levels must simultaneously skyrocket, as if the market and advisors are sitting on the opposite ends of a metaphoric seesaw? The answer is a definitive “NO!”
Those of you who have been following my "Advising the Advisors" series know that I am a professional sport psychologist, and now I teach financial professionals the exact same skills that I have been teaching to professional, Olympic and world champion athletes for more than 30 years. During crunch time (market crashes for advisors or losing an important game for quarterbacks) there are many parallels at play:
• Advisors may worry about how to handle disgruntled clients who panic and complain about their “losses” during market crashes. NFL quarterbacks may worry about coaches, sports reporters and fan reactions when they and their teammates underperform.
• Advisors may feel guilty about client “losses” and worry about their responsibility to serve as stewards of clients’ and their families’ wealth and therefore question whether they are able to continue. When a game goes south, NFL quarterbacks may question whether they really have the talent and skill that coaches, teammates and family have credited them with for so many years.
• Advisors may confidently follow a “game plan” when the market is on fire, but be tempted to make changes when the market tanks. NFL quarterbacks may perform like Super Bowl winners when their team is doing well, but panic and lose confidence when faced with adversity during a game.
Consistently successful NFL quarterbacks and financial advisors are able to endure the rigors of uncertainly and unpredictability. They are “mentally tough” and view obstacles as challenges to grind through. What is the difference between advisors and quarterbacks who manage/master the stress inherent in such obstacles and those who fall victim to it, get overwhelmed by stress and fail?
The Real Culprit Is Your 'Internal Critic'
It’s important to understand that neither the turmoil inherent in the stock market nor that in a football game actually causes stress for advisors or quarterbacks, respectively. Read that line again. It’s true. Upsetting events that take place in our lives are NOT the cause of our stress. Instead, stress is caused by negatively interpreting the events that are taking place in our lives. It’s the self-talk habits we have developed using that little voice in our heads.
Because that voice is so often negative (such as starting sentences with “what if…” “I hope I don’t,” etc.), I refer to it as our “Internal Critic.” The good news is that you always have a choice regarding how to interpret challenging events and what to say to yourself. The little voice does not have to be a “critic.” You can actually make it into your best friend!
This is not a new concept. The wisdom about how our inner thoughts and beliefs about events are the critical determinants of our well-being has been proposed by scholars for centuries. The Greek philosopher Epictetus said, "Men are disturbed not my things, but by the views which they take of them." In Hamlet, Shakespeare wrote, "There's nothing either good or bad, but thinking makes it so." Famous psychoanalyst Alfred Adler put it simply: “We are influenced not by the facts, but by our interpretation of the facts.”