Topics: Resilience

Emotional regulation and decision quality

There will be many times in an investor’s career where a stock is moving against the position while news flow is noisy and messages are coming in. Often, in times like this, an investor’s attention may narrow as the time horizon shortens so that the urge to act starts to outweigh the case for acting.

Most investors recognise this state, even if they do not always name it. And they absolutely should be aware of it. It has a direct bearing on decision quality.

Emotion in investing is often treated as something awkward or slightly embarrassing, as though serious professionals ought to be able to operate above it. That is unrealistic. Emotions are always present. The better question is whether they are being noticed and managed well enough to stop them distorting judgement.

This is not about becoming flat or robotic. In fact, emotion carries useful information. Discomfort can be a warning. Excitement can point to asymmetry. Anxiety can reveal uncertainty that has not been thought through properly. The issue is what happens when those signals are not regulated.

Under pressure, the body moves first. Attention narrows, while threat sensitivity rises and ambiguity becomes harder to tolerate. In markets, that can show up as forced action, brittle communication, overreaction to price or a stronger attachment to an existing view, simply because changing course now feels psychologically expensive.

That is why emotional regulation is not a side topic. It is part of investment skill.

The practical discipline is to create a gap between state and action. What is actually happening here? Has the thesis changed, or has my internal state changed? Am I responding to evidence or trying to relieve discomfort? Is this urgency real, or am I just finding uncertainty hard to sit with?

Investors who can ask those questions in real time usually make better decisions. They are not emotionless. They are simply less likely to let emotion take the wheel.

This matters in teams as well. Emotional states spread quickly. One person’s agitation, certainty or defensiveness can alter the tone of a discussion and narrow the group’s thinking. Teams that regulate well do not remove emotion from the room. They stop it from running the room.

In a profession shaped by pressure, volatility and incomplete information, this is not optional. Investors need enough awareness of themselves to stay thoughtful when markets or meetings start to feel loud.

The goal is not to eliminate feeling. It is to preserve judgement when feeling is present. That is a more realistic standard and, ultimately, a far more valuable one.

Re-framing performance goals for a senior investor

The Brief

The individual was a top performing long-only equity portfolio manager who experienced the first extended period of underperformance in their career. Goldcrest were asked to help the individual recover personal resilience, explore the currently held investment philosophy and process for investment decision making process and rebuild for the future.

The Engagement

A Goldcrest coach with experience working as a portfolio manager engaged with the client for a 6-month term. The assignment began with an alignment meeting with the investment team head to understand the organisational context, individual development areas and desired outcomes. The personality psychometric was used to generate self-awareness, particularly at times of stress, alongside an emotional intelligence diagnostic to develop further insights in service of the individual’s personal resilience, interpersonal relationships, and investment decision making. 

The Outcome

Work on boundaries and renewal activities boosted wellbeing and enabled a re-framing of performance goals through the lens of inputs to stabilise and build resilience. A reformulated approach to investment philosophy, process and decision making introduced more recognition of uncertainty and agility, and improved investment performance.

Personal sustainability & renewal

That can be to our detriment particularly if it causes stress and burn-out.

Pressure can lead to stress which is accompanied by a strong biochemical reaction that can activate our fight / flight survival responses. When stress is chronic, the sympathetic nervous system is triggered too much and too often – leading to an ‘always on’ setting or ‘spike and crash’ pattern that can impact performance and wellbeing. As a consequence, working sustainably under pressure, requires behaviours that support recovery and, more interestingly, renewal.

As Richard Boyatzis wrote in “Thrive and survive: Assessing personal sustainability”:

“Cumulative stress contributes to a loss of engagement and cognitive functioning, and it reduces learning from coaching, training, or education.”

To prevent this happening, Boyatzis maintained that “the only antidote is renewal in terms of the arousal of the parasympathetic nervous system.” That’s because our parasympathetic nervous system calms us down after a period of sympathetic activation. These two branches of the autonomic nervous system work in tandem, an accelerator and a brake if you will, revving us up and slowing us down. When they are in harmony all is well, however if there is dysregulation then problems follow.

Given its importance, it is strange that we are not more explicitly aware of the value of renewal activities on the parasympathetic nervous system. Happily, we do know this implicitly and often naturally self-orientate towards them. Helpfully, they are also integrated with many social conventions, earning them a place in our rituals, hobbies and traditions.

Types of renewal activities

Considering what there is to gain from renewal activities, what exactly are they?

Broadly speaking, they can be categorized into four themes – all of which can stimulate that all-important parasympathetic nervous system. When choosing, the key is to find something you enjoy, so it doesn’t feel like a chore. If it’s fun for you, you’ll do it regularly. And, when it becomes a habit and part of your regular routine, you’ll start to reap the rewards from your consistent practice.

1.    Social renewal activities

Going out for a meal with friends or family is so much more than having a catch-up. When you’re laughing with loved ones, you’ll start to relax, alleviating tension in your body and brain and re-regulating your nervous system. Other social renewal activities to recharge your batteries are playing fun games with others, sharing in collective experiences like listening to music or singing or spending quality time with a much-loved pet.

2.    Manual renewal activities

If you like to do things with your hands, trying out some craft hobbies can be a fantastic way to take your mind off work and relieve any pressure. For good reason, mindful colouring has seen a surge in popularity in recent years. Or many people, who became keen gardeners during the pandemic, still enjoy their green-fingered hobby’s mental and physical benefits. You could also try your hand at painting, pottery, knitting, woodwork, flower arranging and, believe it or not, with the right mindset, even household tasks like washing up or folding washing can serve this purpose.

3.    Slow movement renewal activities

The advantages of high intensity exercise are well reported, but these are more of a sympathetic activity. For renewal activities, movement should take a slower pace. Walking is the prime example and one that can be done anywhere, with anyone. Yoga is another great renewal exercise, as are slower-paced martial arts like tai chi or qigong. Dancing is another great example of a renewal activity as could be light physical work of a practical nature around the house or through volunteering.

4.    Reflection renewal activities

Finally, finding time to reflect can be a highly effective renewal activity. If you have faith, this could include prayer and meditation, but if not, a secular mindfulness practice can serve a similar purpose. Walking is, again, another wonderful activity that’s great for reflection – especially when in nature. But really anything that you do that allows your mind to slip into neutral, wander and return, has great value.

Adding renewal activities to your list of things to do

When it comes to renewal activities, there is no better time to start than now.

However, by definition, people who need them most don’t seem to have time. Finding space in your day can be challenging but is essential to being able to sustain your performance and wellbeing for anything but the short term.

It might seem that taking time out is a diversion that stops you from working through your to-do list. However, prioritising a renewal activity will ultimately make everything on that list easier to complete. Your mind will be clearer, your mood better and you’ll be more efficient.

Renewal activities also inoculate us to the effects of pressure. They build our tolerance to stress and paradoxically enable us to accomplish more, whether that be in a the financial services or otherwise.

The inner game of tennis – how it can help off court

The physical practice necessary to become a Grand Slam champion is clear for all to see. It also requires a huge amount of mental work for players to be at the top of their game. In his seminal book, The Inner Game of Tennis, Timothy Gallwey explored the part the mind plays in successfully learning and performing in sport. It’s an interesting read with many themes that are also pertinent for those looking to improve their capabilities at work.

Here, we explore three of the key ideas Gallwey highlighted as vital to success in The Inner Game of Tennis: self-awareness, self-acceptance and self-trust.

Self-awareness

Self-awareness is a prerequisite for learning and growth. It provides us with the perspective needed to understand ourselves better and to recognise our strengths and weaknesses. Having self-awareness is vital as, without it, it is almost impossible to focus attention where it is needed. Being honest with ourselves helps us gain an accurate evaluation of where we are currently relative to our aspirations.

Self-acceptance

A key enabler of self-awareness is self-acceptance. Letting go of negative self-judgement and embracing ourselves as we are at the time removes a key inhibitor to being honest with ourselves. Gallwey suggests that self-acceptance enhances the accuracy of our self-awareness and reduces negative emotional interference that can get in the way. By accepting ourselves in that moment without judgement, we can moderate the discomfort of not being who we thought we were or want to be and treat any setbacks as learning opportunities rather than failures – something the numerous greats of tennis show during the ups and downs of their matches. The Inner Game of Tennis clearly showing itself.

Self-trust

If we accurately know ourself, we can trust ourself, allowing us to approach challenges with less doubt and more certainty. In 2023, Vondoursova was the first unseeded woman to win Wimbledon – something that would have been nigh on impossible to achieve without self-trust. She clearly showed that she believed in herself, took the opportunity presented to her and demonstrated the resilience necessary to take the risk of truly showing up and giving her all. Crucially, self-trust decreases a person’s need for external validation or approval. Instead, it helps a person improve their conviction to pursue and achieve ambitious goals – be it to win Wimbledon or to achieve other personal or professional aims.

How a coach can help

Of course, knowing that self-awareness, self-acceptance and self-trust help us learn and perform better is very different to actually being able to do these things.

Fortunately, they can be developed – especially with support from a coach.

For instance, coaches can play a significant role in assisting individuals in developing self-awareness. Through reflection and feedback, coaches can help clients gain insight into their strengths and areas for improvement. For example, Novak Djokovic is now excellent when he comes into the net, whereas in the past opponents recognised this as his weakness. His coach, Goran Ivanišević, helped him identify this as a development area and he then did the work to round out his game. Coaches, therefore, act as a stark mirror, reflecting back a truthful image.

When it comes to self-acceptance, coaches can help a person quieten their inner critic. By creating the opportunity to get to know our inner critics and their motives better, we are able to renegotiate that relationship, making room for a happier and more liberated mindset. In doing so, a coach can facilitate a healthier intrapersonal relationship. Having been a runner up in three grand slams, how Ons Jabeur processes her disappointments through this lens will likely be key to her future success. 

Finally, coaches can also assist in developing self-trust and build confidence. True trust requires us to know both what we can and can’t achieve. Gallwey saw an unfettered positive psychological approach as a prohibitor of self-awareness. In a similar way to the inner critic but with the opposite valence, a Panglossian attitude may not serve us well either. A balanced perspective supports good decision making, appropriate risk taking and can enable us to get into the coveted ‘zone’ where instinct and ego are in harmony.

Using Goldcrest Partners

We are experienced in helping individuals foster stronger self-awareness, self-acceptance, and self-trust. We work with people who want to enhance these skills, to build a solid foundation to develop and improve. In doing so, we support clients in their journey towards achieving their goals and realising their full potential. Call Goldcrest Partners today if you’d like to do the same.

Managing mental health in the workplace

As mental health is a fundamental component of how people think, feel, relate and perform at work, it’s vital to have a company culture that is healthy and supportive.   

Mental health is no longer a peripheral workplace issue. The vast majority of a workforce will have been touched or affected by mental health challenges at some point in their career, whether it has been overcoming difficulties personally or supporting someone who has.

Recent years, particularly during and following the pandemic, brought mental health into sharper focus. While the virus itself was not a cause of mental health conditions, the global response, including prolonged uncertainty, isolation and changes to working patterns, created an environment in which anxiety, stress and low mood were more likely to emerge. In many cases, these challenges were dormant or manageable beforehand, but were intensified or newly triggered by the circumstances people found themselves in.  

For some, this period was especially difficult, particularly those with existing vulnerabilities or limited support networks. For others, it became an unexpected catalyst for adaptation, prompting reassessment of priorities, stronger boundaries and healthier work-life balance. What became increasingly clear was that mental health exists on a spectrum, fluctuating over time and shaped by both personal resilience and organisational context. 

Awareness in the workplace

A healthy workplace culture acknowledges mental health risks without defining people by them. While it is vital to recognise stressors and challenges early, it is equally important not to assume fragility or inevitability.   

Mindsets, therefore, matter. A tendency to catastrophise or to frame experiences in extremes can inadvertently undermine wellbeing. While the placebo effect is well known (where positive beliefs improve outcomes) the “nocebo” effect can do the opposite, reinforcing difficulty and diminishing confidence.   

And therein lies the rub. How do we adequately acknowledge very real personal stressors and mental health risks while, at the same time, keeping ourselves from making them a self-fulfilling prophesy?   

The key is to be aware of both the potential mental health issues that may arise and our ability to overcome them. 

Tips for leaders

1. Everybody’s different

How the working world has changed since the pandemic has shown that trusting people to manage themselves is not just possible but highly effective for the business and something that individuals prize. If you can maintain trust and flexibility, employees will continue to find their way to optimise their approach. It might look different for everyone but that is likely a good thing.  

2.  Wellbeing and performance

Prioritising performance over well-being in anything but the short term is a false dichotomy. They are two sides of the same coin. If we allow our people to attend to their well-being, then they perform for the long term. Performance without well-being is unsustainable, particularly in an ‘infinite game’ like financial services. At Goldcrest Partners, we believe an emphasis on both well-being and performance will yield superior long-term outcomes for organisations and individuals.  

3.  Slow and steady wins the race

Change often fails because it is ‘too much, too soon, too fast’ for the individual or organisation to tolerate. If we let people travel at their own pace and provide appropriate boundaries and encouragement, then it will certainly pay dividends.

In summary, at Goldcrest Partners, we believe it is important to be both vigilant and confident in the ability to mitigate mental health risks and support individuals if needed. Furthermore, allowing individuals the flexibility to optimise their working habits and trusting them to do the right thing may prove to be a key factor in not just mental health but also attracting and retaining the best talent.   

The upside here is a competitive advantage in your people.