Dear clients,
During this time of uncertainty, we are going to continue with this trend of reaching out to you regularly to check-in and share with you our two cents on the ever-changing environment around us. Our goal is both to keep you informed, and invite conversation.
This week, we’re writing with a focus on keeping your mind healthy. Pandemic + falling financial assets + an uncertain economy + the 24-hour news cycle + the inability to connect with your friends and family as you traditionally do = an acute, stressful environment that inhibits the ability to step back and gain perspective. In order to keep yourself healthy and to prevent action that hurts or destroys your long-term plan, you must manage that stress to restore some sense of control.
When our brains are stressed, it becomes incredibly difficult to rely on past experiences and knowledge to make smart choices. Our prefrontal cortex is less active. Our bloodstreams flood with adrenaline and noradrenaline. Our pulse and blood pressure rise. Our muscles tense. This narrows our ability to focus on the long term and increases our emphasis on the negative. It’s all part of being a human. An interesting article recently posted in the Wall Street Journal focused on this very issue. Dr. Candace Raio, a cognitive neuroscientist at NYU Langone Health in New York summed it up perfectly: “In looking for the quickest way to resolve uncertainty and assure safety and survival, you might also be weighing what other people are doing more than the objective information in front of you.”
So, how can you restore some sense of control in this environment and your portfolio?
1) Focus on the positives. We talked about this last week, but remind yourself of the preparation we’ve done in anticipation of a market pullback.
2) Ward off stress in the ways you know that work for you. Walking, painting, watching a comedy. As Dr. Raio’s quote above points out: take care to avoid being wrapped up in someone else’s stress.
3) Create shared experiences using video technology. There are a lot of great ideas out there on how to do this: make the same meal as your friend, watch a movie “together,” or enjoy a happy hour. This is different than an email or a text. Seeing the faces of your loved ones releases serotonin naturally.
4) Avoid reacting to the market volatility of the day. There’s a lot to be said for the ‘sleep on it’ rule of thumb.
5) If you have done all of the above and still feel the only way you can remain calm is to move some portion of your portfolio away from the stock market, call us. We’ll talk through the pros and cons of a potential change in the context of your unique picture. We would then talk about ways in which we could take emotion out of the move. That might mean dollar-cost averaging or selling specific shares. The more we can take this off your plate and relieve stress, the better.
As we said last week, our entire team is as easy to connect with as we’ve always been. We’re at the same telephone number, the same email addresses. We welcome catching up with you and hearing what we may be able to do to make life easier.
Take care, and stay healthy!
