Investment management is becoming more and more like stress management these days.   I think that’s true for investors as well as financial advisors.

Sometimes we joke in the office about breaking open a bottle of whiskey after a particularly difficult day.  And if the booze would provide any real remedy, today would have required a jumbo-size bottle.

All jokes aside, I didn’t consider pouring myself a drink today but I did think about how a drinker might help. What I mean is, I thought about how an alcoholic in recovery might respond to the situation investors find themselves in.

I thought about this because, as I’ve mentioned, the men’s group I belong to often uses the 12 Steps of Recovery in dealing with difficult situations.  This might sound weird but follow me down the path for a few minutes.

The first step of recovery includes an admission of powerlessness and a declaration that “our lives had become unmanageable”.   Let’s see how this idea might help us deal with the current investment landscape.

1.  What are we powerless over?

Certainly, we are powerless over the stock market.  We are powerless over interest rates, unemployment, and the financial crisis.   That part is easy.  Here’s the hard part.  We’re also powerless over the past – investments we made that have lost money.  And to make it worse, we’re powerless over knowing what is in store in the future. When you stop to think about it, we’re actually quite powerless over a lot.  Do you feel like I’m just rubbing salt in your wounds?  I’m not – unless you are Bruce Steinhart who was a bully to me in 4th grade.  Bruce, if you are reading this….yes….I am rubbing salt in your wounds.  For everyone else, I’m not rubbing salt. Keep reading.

Its crucial for all of us to identify those things we are powerless over ( especially decisions we made in the past and not knowing what the future holds).  I say this because the more we worry about things we can’t control, the less energy we have to make the right decisions now.   Before I get to what those decisions are, lets continue with our step work.

2.  Is some part of your life unmanageable?

I just read in the Investors Business Daily that 30% of us aren’t able to get a good night sleep these days.  That tells me that lots of people are consumed by worry.   Are you bickering with your spouse about money?  Are you blaming someone else for your woes?  Has it come between you?  Are you unable to enjoy your life and the good things you still have because you are worried about past “mistakes”  and the future?   If so, you’ll have to admit that some part of your life is in deed unmanageable.

I strongly recommend that you take a few moments to write down what you are powerless over and in what ways your life has become unmanageable.   I have to do this all the time.  If I don’t, I forget that even though I’m a professional, I can’t predict the future and I can’t remake the past.    But when I do this work, its easier for me to take clear-headed action to make the best decisions that I can.  It helps clear away my stress.

Have you taken the time to do this exercise?  What were the results?  Are you too angry to do it?  Are you convinced that this would not help?  Why?

Like this article? You will love getting my free brilliant financial updates! No spam, and I won't give your email address to any other person or company.That's a personal promise. Neal Frankle, Certified Financial Planner, Los Angeles, California

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