3 Simple Steps to "De-Catastrophizing" Scary Events, Such as BREXIT

Here you go again…having to deal with a completely unpredictable event that leads to unpredictable and volatile markets. I’m sure that your least secure clients either contacted you immediately or they are at home obsessing about the impact on their portfolios.

Did you recently make some investment recommendations to clients and those investments got hammered by the BREXIT situation?

Do such events cause you to lose sleep, worry about disgruntled clients calling you, or even question your core investment strategies for your clients?

These are common sources of advisor stress, but it is crucial to realize that your stress is NOT caused by BREXIT, or volatile stock markets. Those are neutral events…yes, I said NEUTRAL EVENTS.

What actually always causes our stress is our interpretation of the events in some catastrophic way.

In short, it’s what we say to ourselves about the events that causes stress…our inner self-talk.

The Culpret is Catastrophic Self-Talk

The burgeoning field of “Cognitive Therapy” has provided us with many techniques to grab potentially stressful situations and “de-catastrophize” them, resulting in significant avoidance of or calming of the stress.

Essentially, stress-prone folks have developed a habit of looking at a situation and assuming the worst possible consequences of that situation are 100% likely to happen.

So, with the initial BREXIT crash of 600 points, many advisors and their clients assumed the market would continue to tailspin and portfolio values would plummet.

Step #1: Stop the Catastrophizing Self-Talk, Now!

Put a #64 rubber band on your wrist (the fat ones that come with your mail).

The first clue that you are using catastrophic self-talk is using the phrase “what if.” The problem with “what if’s” is that you tend to believe that there is a 100% probability that what you fear happening will actually happen. Let’s say your thought is “What if this aggressive client fires me because of my recommendations for him and what just happened with the market?

Once you catch yourself using such anxiety provoking phrases, immediately stop by snapping the rubber band on your wrist and telling yourself to “stop this silly thinking.”

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Step #2: Take Some Deep, Relaxing Breaths

Breath in through your nose for 4 seconds, hold it for 4 seconds and breath out through your mouth for 8 seconds. This forces you to breath through your diaphragm, which is the most calming breathing.

Step #3: Challenge the “What if” Thought

Now that you have calmed yourself with your breathing, it’s time to challenge the thought. Most catastrophizing thoughts are irrational because what you fear has a very low probability of occurring, so answer the following questions for yourself:

“ What is the actual probability that this client will fire me over this?

“Is there anything I can tell this client to calm his fears and anger?”

“My core values have been developed over many years of examining stock market history, being mentored by experts, etc., so why would I change those values now?”

“What is the worst thing that could happen if I lose this client?”

“Even if this worst case scenario did occur, what would I do?” (example responses: “I would focus on my other clients and get new ones,” or “I would rationalize that this pain in the neck client is now off my back,” etc.)

By focusing on the actual probability that what you fear will happen, you will dispel much of your fear. By coming up with a plan for dealing with the situation if it really did happen, you will begin to see that your fear is not as earth-shattering as you imagined.

These are three simple but very important steps. In fact, my advisor clients tell me that consistently practicing these steps has had a major impact on their stress!