Investors Learn How to Improve Returns by Managing Their Emotions

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Over 200 people attended the first-ever 'behavioral advice' client event in San Francisco, titled "How Emotions, Psychology and Values Affect Performance". Behavioral advice focuses on enhancing moral and emotional competencies to improve the financial-decision making process. Participants took a survey to assess their stress levels, completed a "values cards" exercise and practiced a deep-breathing technique, among others.

Anyone who has ever felt their blood boil after being cut off in traffic knows this:

Heightened emotions sometimes lead us to make poor decisions.

It's a fact that holds true in many areas of life, including our finances.

"Emotions sacrifice accuracy for speed," says Chuck Wachendorfer, chief operating officer for the Lennick Aberman Group, the Minneapolis-based performance-enhancement consulting firm. "The market over the last 18 months has really caused a lot of confusion, frustration and anxiety, not only for clients, but also for financial advisors … They're highly emotional and when we're highly charged we want to do something with those emotions."

Wachendorfer and the partners of the Lennick Aberman Group have taught hundreds of financial advisors across the country about how to make sound decisions in the presence of high emotions.

Now, for the first time, the group is taking those proven, research-based methods straight to investors, offering Behavioral Advice workshops and webinars nationwide.

"Our emotions are OK. It's important not to judge our emotions as good or bad," says Lennick Aberman founding partner Rick Aberman, Ph.D. "There are times in our life when we're going to be afraid or fearful or angry and there's a lot of that stuff going on right now."

But the Lennick Aberman workshops teach investors how to stay focused in the face of extreme emotions. "In other words," Aberman says. "How can we keep from doing something stupid?"

Some 200 Ameriprise Financial clients in San Francisco attended the recent four-hour Lennick Aberman workshop "An Introduction to Behavioral Advice - How Emotions, Psychology and Values Affect Performance."

Clients first took a survey to assess their stress levels. In a sign of these financially trying times, nearly two-thirds of the group reported above-average tension.

"Your message is a timely, and a timeless, one," says Christopher Boyer of El Sobrante, Calif., who attended the event. "I was pleased to hear what you had to say about ethics and values-driven decision-making … It was fascinating to me to look around and see a couple hundred people who were there ostensibly to hear about making money, closing their eyes and imagining serene places when they were asked to. I think there's a hunger for success beyond the bank balance."

Attendees used sets of "values cards" to identify their five core values.

"What we're doing by identifying our values is we're identifying our ideal self," Aberman says.
With those values nailed down, we can make thoughtful decisions - not just about finances, but about every aspect of life.

"People are a little bit surprised because they see the universal application of this," Aberman says.

Another attendee, Bob Kudrna of Alameda, Calif., found the values cards an "amazingly effective tool."

"The key words and the statements are really pertinent to financial issues, not to mention mental, spiritual and physical realms," Kudrna says.

Investors also learned a bit about the neuroscience behind emotions and decision-making, as well as some relaxation techniques - such as a deep-breathing technique - to manage the physical response to stress.

"We're disarming the fight or flight syndrome," Aberman says.

"Performance, in any area of life, comes down to three things: talent, skill and decision-making," Wachendorfer says.

"We're born with talents and skills develop over a lifetime, but the Lennick Aberman behavioral advice workshops teach investors how to manage their emotions and make sound decisions."

"We can all become better decision-makers," Wachendorfer says. "You'll actually improve the growth rate of your portfolio … You will have more money in your pocket. You'll be a better decision-maker in all areas of your life."


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Chris Ambrose
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