Staying Calm During The Downturn

It's jarring to see your portfolio drop 30% in a few days. No matter how experienced an investor you are, nobody likes to lose money. In times like this, there's a lot of noise out there. Ranging from good advice to outright scams.

No one can predict the future, but markets have been through the wringer. From famines to world wars, financial collapses to political scandals. Odds are we'll get through this too. Things will bounce back. Until then, here's a couple things you can do to weather the storm.

Social Media Distancing

A lot of folks are stuck at home, bored. It's easy to lose your day to endless scrolling. Constantly checking your feed isn't making anything better. It only adds to your anxiety and stress. Check in to stay responsibly informed and stop there. This will reduce your likelihood of getting emotional. Emotional trading is never good. Stick to the plan.

Stop Checking Your Account

The move to digital banking is great for investors. Financial services are more accessible and convenient than ever. 24/7 access to your account can have its downsides though, similar to 24/7 access to social media. Constantly checking your balance does you no good. The more you log in, the more likely you'll get caught up in the moment.

Enjoy The Sales

It doesn't feel like it, but these are actually some of the best times to be an investor. If you're fortunate enough to be able to continue contributions, this is the sale of a lifetime. It's easier said than done. It's tough to invest when things are so volatile, but if you can handle the short-term pain, more than likely you'll be glad in the long run.

"Be fearful when others are greedy and to be greedy only when others are fearful.” - Warren Buffet

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The Art of Giving Feedback

Constructive feedback is an awkward affair. You don't want hurt feelings, but recognize the importance of honesty. You've tried the classic "hoping things will get better on its own" and unfortunately it hasn't played out. When giving feedback, here are a few things that I try to keep it mind. Start with empathy. Step into their shoes and understand their story. If you don't know, ask. Be genuinely curious. Feedback is a dynamic affair. Shared communication with a shared goal towards progress. Take the emotion out of it. Focus on the situation, not the person. Focusing on the person adds unnecessary weight to an already emotionally-bloated event. Be specific. Give clear examples. Vague feedback equals dismissed feedback. Doing above won't de-awkward things fully, but it will dampen it and increase the chance of better outcomes.

Today's Special: Humble Pie

You champion a project, fight for an idea, and then...reality sets in. That churning in your stomach isn't butterflies, it's the realization you've missed the mark. Pride will puff up your chest, and kick in the "defend at all costs" instinct. But arguing with the umpire never changed a call. Admitting you're wrong isn't a sign of weakness. It can strengthen your professional standing. In a world obsessed with the illusion of infallibility, the courage to adjust course is a breath of fresh air. It shows you're confident enough to be wrong, and adaptable enough to learn from it. Do your research, think critically, and stand behind your decisions. But when the data whispers (or screams) otherwise, don't be afraid to swallow that slice of humble pie. Be the first to acknowledge. Don't wait for someone to point out your mistake. Be open, take responsibility, and most importantly, focus on what you're going to do to address it. Don't dwell ...

Negative Feedback, Positive Lessons

In the battle against plastic bags, a five-cent tax was shown to be much more successful at deterring usage than a five-cent credit for bringing your own bags. Carrots satisfy but sticks sting, and they sting hard. So we default to the less painful choice of avoiding loss. Loss aversion impacts the way we process information. A 2019 study invited participants to learn through a series of multiple choice questions. Each question only had two options to choose from. Whether guessing correctly or not, they would still learn the right answer. Despite the identical learning opportunity, participants were much more successful at recalling the answers they guessed correctly than those they got wrong. "You're right!" feels good. We savour the moment, analyzing every detail. "You're wrong!" stings. We want to quickly forget, dismiss, and move on. When we succumb to loss aversion, we miss opportunities to learn. Failure is part of the process. We'll experie...

Herman Ye

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