Preventing a Stress Meltdown
amidst Economic Chaos
By Bruce Cryer
It sounds like a bad dream. Financial meltdown.
Global markets in chaos. Government bails out banks and other
financial institutions in worst crisis since the depression.
Citizens watch as personal wealth plummets.
What a roller coaster it’s been emotionally.
Certainly there have been a few positive trends but lots of
negatives that could mean serious consequences down the road.
The questions start racing into a blur. What’s going to happen
next? Is it time to get out? Have I really hit the bottom? Will
I be able to recover if the numbers don’t improve quickly?
No we’re not just talking about the economy;
we’re talking about an alarming visit with your doctor.
Hopefully this hasn’t happened yet. But it probably has happened
to someone you know, maybe even someone you work with. It’s time
to face a stark reality of life today: stress can take its toll
on our energy, our well-being, our decision-making, the quality
of our relationships, even our financial health.
Our organization has been researching the
stress-performance-health relationship since 1991. We’ve
uncovered some startling information about how directly the
stress of work pressure, particularly high stakes decisions
traders face many times a day, affects us. Fortunately the news
isn’t all gloomy.
First some context. The Wall Street Journal
recently reported on what it called a "binge-purge" approach to
stress management.
"
…millions of
Americans are managing their stress in precisely the wrong way.
They compartmentalize by stressing out all day – and then push
off recovery to isolated blocks of time like evening yoga
classes and weekend getaways."
Many of us binge for weeks and months on
unhealthy stress levels, then expect that a "purge" can cure us.
Unfortunately, while we wait for the ‘cure’ – the week-long
vacation, a weekend at the spa, or even the massage certificate
your family gave you as a birthday gift -- our performance and
our health suffer. To understand why, and what
is
the right approach to sustaining peak performance
during stressful times, let’s take a few quick lessons in human
physiology.
Fact #1: The human body doesn’t care if it’s a
BIG stress or a little one.
Big or little, stress affects the body in
predictable ways. A typical stress reaction – which most of us
experience dozens of times each day -- begins a cascade of 1400
biochemical events in your body. If these reactions are left
unchecked we age prematurely, our cognitive function is
impaired, our energy is drained, and stress has robbed us of
effectiveness and clarity. Ever noticed how it can take three or
four days of your vacation before you finally feel relaxed? This
is because of the build-up of stress chemicals that have been
doing their silent damage without our approval. Research
indicates that the relentless impact of minor, stressful events
may be more damaging to health than one big stressor. In
addition
,
many people don’t even seem to notice
their stress. Or they have become so adapted to the daily
pressures, irritations and annoyances of life, it starts to feel
normal. Yet the small stresses accumulate quickly and we may not
realize how much they impair performance and health until the
damage has been done.
Fact #2: Understanding basic physiology brings
new awareness you can use to reduce stress.
A remarkable system that your brain uses to
manage roughly 90% of your body’s processes is called the
Autonomic Nervous System (ANS). One of the essential tasks the
ANS performs is to signal the heart to either speed up or slow
down to accommodate changing demands: it’s time to run, or it’s
time to sleep. The ANS has two complementary branches and your
health and ability to think clearly and make good decisions are
best when these two systems are synchronized and in balance.
However when you’re experiencing stressful emotions like
anxiety, frustration, or fear,
whether you’re conscious of
them or not, higher brain processes
become seriously compromised. Brain researchers call this
phenomenon cortical
inhibition, meaning the smart part of
your brain can’t function at its best. For traders, cortical
inhibition can be disastrous -- resulting in poor decisions, the
inability to even make a decision and execute the trade on time,
loss of focus on the big picture, and more.
In The Psychophysiology of Real-Time
Financial Risk Processing
1,
MIT Sloan School of Management’s
Andrew Lo
and coauthor
Dmitry Repin
investigated the role that emotion plays in the
high-stakes and high-pressure world of professional securities
traders, individuals who, by their training and inclination, are
presumably among the most rational decision-makers in the
economy.
[Authors] Lo and Repin strongly suggest that
emotional responses are a significant factor in the real-time
processing of financial risks, even among the most rational
investors in the economy. These findings support other studies
that point to the significance of cognitive-emotional
interactions and the genesis of what, for the lack of a more
precise term, we call "intuition." Experts' judgments, the
researchers maintain, are often based on this subconscious
process of intuition, and not necessarily purely on explicit
analytical processing.
In fact, the data suggest that the most
successful traders often seem to function without the ability
(or need) to articulate the reasoning behind their
decision-making. A reasonable conjecture, say Lo and Repin, is
that emotional mechanisms are at least partly responsible for
the ability to form intuitive judgments and for those judgments
to be incorporated into rational decision-making. Such a
conclusion, they add, may not be as puzzling as it seems.
… emotion is a significant determinant of the
evolutionary fitness of financial traders. In short, since
unsuccessful traders are generally "eliminated" from the
population after a certain level of losses, the authors
conjecture that the presence of emotion in the financial
community is, in a Darwinian sense, desirable.
In a follow up paper, Fear and Greed in
Financial Markets: A Clinical Study of Day-Traders
2,
Lo, Repin, and Brett N. Steenbarger "find that subjects whose
emotional reaction to monetary gains and losses was more intense
on both the positive and negative side exhibited significantly
worse trading performance."
The key is having the most productive emotions
possible. Let’s start by looking at two primary hormones.
Fact #3: Choosing the right hormones maximizes
performance.
Two hormones in the human body play a central
role in performance, energy levels and overall well being:
cortisol and DHEA. Cortisol is called the ‘stress hormone’
because it is secreted in large amounts when we are under
stress. Cortisol plays a positive role in overall health, but
when we produce more than we need, it creates problems. Some
researchers believe a majority of the working population
overproduces cortisol daily, with dire health consequences.
DHEA, its cousin, is often called the ‘the
anti-aging’ or ‘vitality hormone’ because it’s plentiful when
we’re young, and when we’re producing large quantities of it we
feel energized. DHEA and cortisol are made from the same
building block hormone. Consequently, if your perceptions are
stressful, that tells your body you need more cortisol, so more
cortisol is produced -- at the expense of DHEA. That’s okay in
the short term. However, chronically high levels of cortisol
combined with low levels of DHEA are prevalent in health
conditions ranging from obesity, diabetes, chronic fatigue
syndrome, migraines and fibromyalgia to osteoporosis, high
cholesterol and other chronic conditions. It is also responsible
for premature aging. In routinely stressful jobs, the rate of
aging can be extreme.
Chronic emotional stress = excess cortisol =
accelerated aging
.
Research has now established that stressful
emotions fuel cortisol production; while positive emotions fuel
healthy DHEA levels. Simply learning to relax, or having a
"relaxing" massage or spa weekend, may briefly slow down the
nervous system but will not necessarily re-balance the DHEA/cortisol
levels, which have been imbalanced as a result of the constant
low-grade anxiety that many traders experience throughout the
year.
Fact #4: Your brain and heart work best
when there is synchronization between all systems.
This is called
coherence.
Researchers throughout the ‘90s established that
with every beat of the heart intricate messages are being sent
to the entire body. This research has shown a critical link
between the heart and emotions and demonstrates how the heart
responds to emotional and mental reactions (see graphic below).
As people experience emotional reactions like frustration,
irritation, anxiety, or anger, heart rhythms become chaotic,
which interferes with the communication between the heart and
brain. Blood vessels constrict, blood pressure rises, and the
immune system is weakened. This consistent imbalance can put a
strain on the heart and other organs, and eventually leads to
serious health problems.
However you can learn to quickly bring your
heart rhythms and brain into balance. The key is shifting the
emotion
to a positive one: remembering a favorite time on
the beach, the fun of horsing around with your kids, a favorite
activity like skiing or cycling, even the fun of a big win.
Achieving coherence is simpler than you think, and can have more
dramatic benefits than you can imagine. An effect of becoming
coherent is what researchers call
cortical facilitation.
Decision-making is quicker and more sure,
emotional balance is easier to sustain, and physical
coordination is enhanced (athletes love this).
A new software/hardware system called the emWave
PC® allows you to view your heart activity in real time, and
includes easy-to-follow techniques for bringing synchronization
and coherence to your heart, brain, and nervous system in
moments. It’s remarkable how differently your heart is
functioning depending on whether you’re in a state of
frustration, anger or tension, compared to when you’re in "the
zone". Many traders arounthe world now use the system to get
into the zone
before
making a trade. Traders report
increased energy, more clarity and more effective
decision-making, all without sacrificing speed or quick response
.
Fortune 100 companies like Cisco,
Prudential Financial, HSBC, Shell, Hewlett Packard, Liz
Claiborne, Unilever and Sony
are paying attention, bringing in the programs to improve
performance and reduce health-related costs.
Elite golfers like Vijay Singh, the UK’s
Nick Dougherty, and 2006 European Ryder Cup Captain Ian Woosnam
are all believers. The emWave PC’s offspring is a cute
handheld device called emWave Personal Stress Reliever. It's
about the size of a cell phone and helps you get in the zone
fast.
Lightweight and portable, even
some on the street have caught on.
"The emWave is a real tool for stress
management: a portable device that gives an unbiased assessment
of your stress level in various situations, all in real time.
It's like an iPod into the soul." - Jonathan Blum,
TheStreet.com
Emotional Management Maximizes Traders’ Health
and Performance
Becoming
coherent
by shifting the emotion you’re in creates an
attitude shift, resulting in greater mental and physical
clarity. Athletes do it all the time (think Tiger Woods).
Here’s a simple exercise:
Consider yesterday’s events. Make a list of
activities, situations, etc. and describe your moods or emotions
during each activity. Now place those emotions on the four
quadrant grid above. We’ve listed a few examples. High-energy
emotion like enthusiasm? Place it in one of the upper quadrants.
Low-energy emotion like anxiety? Place it in one of the lower
quadrants. What emerges is a snap shot of the emotional
landscape of your day. The right side is the peak performance
zone. The left is your stress zone. How long did you spend in
each quadrant? The most successful traders and athletes spend at
least 80% of the time in the two right quadrants of the peak
performance zone.
You can be the master of your physiology – and
your emotions -- to maximize your success. Nearly everyone has
more stress today than is healthy or productive. The key is
coherence.
For more information see http://heartmath.com,
or call 1-800-450-9111 or 831-338-8700
About the Author: Bruce Cryer is CEO of
HeartMath LLC, an internationally recognized training and
technology firm specializing in innovative approaches to
reducing stress and improving performance. He is also author of
the Harvard Business Review article, "Pull the Plug on
Stress" (July 2003) and co-author of "From Chaos to
Coherence: The Power to Change Performance."
References
1 Lo, Andrew W. and Repin, Dmitry V., The
Psychophysiology of Real-Time Financial Risk Processing (October
2001). MIT Sloan School of Management Working Paper No. 4223-01;
MIT Laboratory for Financial Engineering Working Paper No. LFE
1039-01. Available at SSRN:
http://ssrn.com/abstract=282863
2 Lo, Andrew W., Repin, Dmitry V. and
Steenbarger, Brett N., Fear and Greed in Financial Markets: A
Clinical Study of Day Traders, (March 2005) MIT Sloan Working
Paper No. 4534-05. Available at SSRN:
http://ssrn.com/abstract=690501
Copyright © 2008 HeartMath. Since 1991 HeartMath has been
dedicated to decoding the underlying mechanics of stress.
HeartMath is internationally recognized for their solutions to
transform the stress of change and uncertainty, and bring
coherence and renewed energy into people’s lives. Research and
clinical studies conducted by HeartMath have examined emotional
physiology, heart-brain interactions, and the physiology of
learning and performance. Through their research they have
demonstrated the critical link between emotions, heart function,
and cognitive performance. HeartMath’s work has been published
in numerous peer-reviewed journals such as American Journal of
Cardiology, Stress Medicine, and Preventive Cardiology, as well
as business journals such as Harvard Business Review and
Leadership Excellence. HeartMath’s organizational clients
include Mayo Health System, NASA, BP, Duke University Health
System, Stanford Business School, Redken, Kaiser Permanente,
Boeing, and Cisco Systems, as well as dozens of school systems
and thousands of health professionals around the world. To learn
more about HeartMath, go to www.heartmath.com.