For the optimist, these are indeed exciting times: unprecedented market movements, an ideal time to make a lot of money as shares tumble. Of course, it is all about timing, and how much lower will the share price fall.
Here is where the careful optimist is very different from the impulsive optimist.
The careful optimist wants to maximise their understanding of what is going on. And they want to look back at times like this: the Wall Street crash, Black Monday etc. What happened and who were the winners: and why? There must be trends, lessons learned from all this. The careful optimist will analyse this data for insights.
But this may be a problem working from home. The data is difficult to get hold of; the systems are slower and prone to break down; and the careful optimist is mindful of the importance of timing.
There are also impulsive optimists even in the world of asset management. They are normally cool, rational, and analytical but still prone to gold-rush fever. The excitement means their logic become psycho-logical: all the well-known biases take over: over-confidence, anchoring, confirmation bias.
They have heard stories and indeed read them every day of some firms and individuals capitalising on the crisis and associated turmoil. And they want a piece of the action. They may lose conviction in their philosophy believing this is literally a golden opportunity.
Some optimists also rather like the new working conditions, and some are even brave enough to say so. They argue it is the new way: who needs to schlep into the office?
Those prone to a half-empty glass can seem paralysed by all this sudden change. They see and remember all the bad news; cancelled contracts and meetings, the inability to work in the same way. The markets have gone haywire; the signals are unclear. Their working conditions have changed. Their personal wealth is in free-fall and their job possibly in jeopardy.
Some pessimists redouble the efforts to try to make sense of all the chaos. This may be difficult with the new work arrangements. The support staff – of all sorts but particularly IT – are not readily available and analysts may not respond immediately.
There are some who see this as the end-of- times: a deep threat to liberal capitalism and a world where ‘Big Brother’ ramps up his surveillance. And rather than adapt, fight-back and try to pick up the pieces they seem to go “off-line” technically, socially and emotionally.
Optimists and pessimists seem to adopt sharply contrasting tactics for coping with stress. Optimists concentrate on problem-focused coping – making and enacting specific plans for dealing with sources of stress. In addition, they seek social support – the advice and help of friends and others – and refrain from engaging in other activities until current problems are solved and stress is reduced.
Pessimists tend to adopt rather different strategies, such as giving up in their efforts to reach goals with which stress is interfering, and denying that the stressful events have even occurred. Further, they have different attributional styles: the optimist attributes success internally and failure externally, and vice versa. Indeed, that is how optimism and pessimism are both measured and maintained.
Another individual difference factor that seems to distinguish stress-resistant people from those who are more susceptible to its harmful effects is known as hardiness. This term refers to a cluster of characteristics rather than just one.
Hardy people seem to differ from others in three respects. They show higher levels of commitment – deeper involvement in their jobs and other life activities; control – the belief that they can, in fact, influence important events in their lives and the outcomes they experience; and challenge – they perceive change as a challenge and an opportunity to grow rather than as a threat to their security.
When considering how asset managers are coping and indeed how likely they are to deal with stress, it is important to use the above factors as a framework over which to overlay a manager’s personality traits.
At this time, all of us are clearly feeling the stress of this Covid 19-induced situation. This is a time when we all need to be acutely aware of mental health so that we can emerge from this period of uncertainty, however deep and long it should transpire to be, with greater hardiness.