Put Your Overcoat On; It’s Raining Hard
Over my lifetime, the U.S. has experienced eight bear market cycles, and in each, it was tempting to think “this time is different.” Now here we are in 2020, and the current crisis is different from the others–not in the depth of the market declines, or in what we know we need to do as advisors to help our clients through it–but because its underlying cause is a virus pandemic. It’s a century-defining humanitarian and economic crisis, and it’s scary. Both collectively and as individuals, we’ll need all the resilience we can marshal to get through this.
Resilience is sort of like putting on an overcoat when it’s raining. Not putting on the overcoat won’t kill you, but the environment is a little more bearable when you have it handy. Your overcoat of resilience can be sewn together in many ways. For example, you may have developed resilience as an investor during the Dot Com Crash of March 2000-October 2002, or the Great Recession from October 2007-March 2009. Those periods of time were tough and scary, but you persevered and your portfolio recovered, and those experiences armed you with some coping skills for what is going on in markets now.
Another form of resilience is optimism; I’m not referring here to any kind of naive, stick-your-head-in-the-sand approach, but rather a reasonable, evidence-based type of optimism that could help us reframe our thinking and feel a little better as we navigate our way through this crisis. Make no mistake, things are bad and will be so for a while, but even in the thick of terrible events, good still abounds in the world.
There has been a lot of work done around the role of optimism in developing resilience. Psychology professor Sonja Lyubomirsky, Ph.D. of Stanford University, who authored The How of Happiness, has researched this topic extensively and in her book describes a relatively achievable, “very small’ variety of optimism that is defined as “…the feeling that you will make it through this day, this month, this year, that there may be ups and downs, but everything will turn out all right in the end.” That sounds like a level of optimism we could all strive toward, but why should we try?
It turns out that optimism is good for our emotional well-being and even our physical health. According to Lyubomirsky, optimists are less likely to suffer from depression and anxiety; they feel more energized and tend to be physically healthier, are more likely to persevere in reaching goals, and they develop highly effective coping skills that they can deploy in times of stress. Those are meaningful benefits that could help all of us in our quest for resilience, and there are many science-based resources available to help us get there.
One to consider is The Greater Good Science Center at the University of California, Berkeley, which supports the scientific study of happiness and what constitutes a meaningful life. Their Guide to Well-Being During Coronavirus, has many actionable ideas for practicing optimism and developing resilience in these times.
- Evidence shows that reframing stressors can help us feel more positive and optimistic. This takes some practice, but the idea is to recast difficulties–such as the isolation of social distancing or the seemingly chronic shortage of toilet paper—to find a silver lining. Maybe we haven’t talked with our cousin in years, and social distancing now gives us the time to finally reconnect; maybe the toilet paper shortage gives us pause and helps us more mindfully appreciate the luxuries we enjoy as residents of a rich, developed country.
- Gaining perspective on difficult events is key to resilience, and research shows that a technique called “self-distancing” can be helpful in taking a step back and seeing the situation more objectively. One way of doing that is to focus on our future self by asking, “How will I feel about this situation in a future time?” That future time could be a week, a month, a year or ten years out—the point is that this “mental time travel” directs our attention away from what is going on right now, and it brings home the realization that the current crisis is a temporary, rather than permanent, state of events. Author and entrepreneur Tim Ferriss has said, “Every bad experience has the remedy of time.” This concept of impermanence helps us gain perspective on everything, from our health to the market volatility we’re seeing as investors.
- A trending method for building our resilience is to unplug from our screens and take a break from the barrage of information we’re subjected to every day. We may find it easier to be aware of the good in life when we’re able to focus on the here and now. And when we do use our screens, we can seek out constructive, fact-based information that is more positive, inspiring, and solutions-focused than what we often consume. Hopeful news article.
Another credible resource for developing resilience comes from ABC News Anchor Dan Harris, author of Ten Percent Happier. He has created a free Coronavirus Sanity Guide, which offers blog posts, talks, podcasts, and meditations from highly-regarded practitioners in the field of mindfulness and meditation. From a podcast titled “How to Handle Coronavirus Anxiety” to an article on “Maintaining Hope in Hard Times,” this website offers an abundance of resources for developing resilience and quieting our worried minds.
At this moment in our history, it’s raining hard outside, so it’s time to put that overcoat on. We could use an all-weather layer of resilience right now, and can nurture the qualities that will help us get through this crisis with our well-being intact. Stay healthy, and be well!