Thursday, November 06, 2008
Learn To Manage Financial Stress: A MarketPsych Guide
Are you glued to the financial news?
Ruminating and checking prices frequently?
Having difficulty sleeping? On edge, tense, or nervous?
These are all symptoms of stress, and they are common for anyone working in the finance these days. Unfortunately, stress can erode the ability to think clearly and perform consistently during the times we need those skills most. Fortunately there are several steps we can take to manage stress that will get us back on track to excellent performance.
Stress is the brain’s way of trying to protect us. It prepares us to handle unexpected surprises and potential threats. When we’re under stress, our adrenal glands release stress hormones such as adrenaline and cortisol. These hormones actually affect our brains, causing a short-term focus, increased pessimism, impaired concentration, reduced attention span, increased mental rigidity, decreased patience, and enhanced detail-focus. These traits can be problematic for investors since they predispose them to make impulsive trades and information processing mistakes. That’s why stress management techniques can help you “keep your head” in volatile and unpredictable markets. In order to reduce stress now and make a long term plan to prevent future stress, try the three stage process in the attached document.