Ari Kiev, M.D., president of SPRI Clinical Trials, was a featured speaker at the upcoming conference Wall Street Unplugged: The Trout Group Investor Seminar -- Management's Guide to Wall Street. The conference was held on Wednesday, July 30, at Midtown Loft & Terrace, 267 Fifth Avenue in New York. The event was targeted to CEOs and CFOs at private and small and mid-cap life science companies to gain better insight into Wall Street and maximize communication with the investment community. View the video here.
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Tuesday August 26, 1:34 pm ET
By Eileen Aj Connelly, AP Business Writer
Volatile market can increase stress for investors; sticking to a plan can relieve anxiety
NEW YORK (AP) -- With the stock market regularly posting triple-digit swings and commodity prices jumping up and down, it's easy to understand why some investors are stressed out.
"There's a lot of volatility, emotionality and irrationality," observed Dr. Ari Kiev, a psychiatrist and author of "Mastering Trading Stress: Strategies for Maximizing Performance."
Though he focuses on how hedge fund traders handle stress, Kiev said the market's recent volatility can trigger the same emotional and physical issues for individual investors. "I think the human psychological underpinning of buying and selling stocks is pretty universal for both the amateur and the professional," he said. But when the stakes are personal, like a family's college or retirement fund that's losing value, the resulting stress may seem a bit different.
ASSESS YOUR RISK. One way to help reduce your investment-related anxiety is to understand your appetite for risk, and allocate your investments accordingly. A start might be taking an online quiz that helps assess risk tolerance. There are many available on the Web, including one at the Rutgers University personal finance site at http://njaes.rutgers.edu/money/.
Several factors influence what kind of risk is appropriate, from your age to the particular goal involved: buying a home, sending one or more children to college, or preparing a comfortable retirement, for example.
"If you're a younger person, with a much longer time horizon, with much greater risk tolerance, markets like this give you an excellent opportunity to put more money to work," said Phil Orlando, chief equity market strategist at Federated Investors in New York City.
MAKE A PLAN. After deciding how much investment risk you are comfortable with, you should identify your goals and develop a plan to achieve them, said Orlando. If you're unable to develop that plan on your own, hire some help, he said. "Establish what your needs are, what your goals are, what your plans are, and the professionals will sit down and put together a program with an acceptable level of risk tolerance."
"You need to be well armed with an array of plans for all situations," agreed Don Montanaro, chief executive officer of TradeKing, a Boca Raton, Fla.-based online brokerage. "You need to spend time educating yourself so that you're prepared for all different types of markets."
ADHERE TO THE PLAN. Even more important than making a plan is sticking with it.
"Under stress, people tend to not follow their strategy," noted Kiev. Just like professional traders trying to justify wrong decisions, individuals might try to hold on to stocks that have turned bad, take on extra risk to make up for losses or sell a winning investment before it has peaked in a move sparked by fear. "People hold on to losers because they don't want to admit they're wrong, they think things are going to get better," he said.
BUILD IN SAFEGUARDS. Montanaro said such stumbles, and the related stress, can be avoided by building entry-point and exit-point targets into an investing plan. "When you go into a trade, you have to have some idea of when you get out of a trade," he said. "At the moment you enter a trade, you should set that exit plan up."
The easiest way to do that is to set up a stop loss order with a brokerage when making a purchase. Such orders set the price at which you would automatically sell a stock when it declines to a certain level.
Montanaro said such built-in moves can help investors avoid getting emotionally involved in daily fluctuations. "You've got to stick to your rationale," he said. "If you find yourself rooting for or cheering for your stock as if it's a sports team, you have to step back."
Kiev echoed the thought. "When you're anxious and you're stressed, you tend to overreact," Kiev said. "That tends to escalate your anxiety and makes matters worse."
MANAGE YOUR STRESS. Kiev recommends using stress-reduction techniques like meditation, yoga and visualization to help handle the feelings that can lead to emotional investing, and notes such methods are most effective when practiced regularly. "When you're in the middle of a stressful market," he said, "it's very hard at that moment to start applying these principles."
Seeking input from fellow investors, for instance in an online forum, can also help, said Montanaro. "Just because you have decided to become a self-directed investor and make your own decisions, you still shouldn't go it alone," he said. "Sometimes you can get so deep into your own analysis tunnel, that popping your head out into the sunshine is a great thing to give you some alternate perspectives on your view."
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Being a short seller is stressful enough, given the recent crackdown on those fund managers targeting financial stocks, and due to the volatile markets in general — indeed financials staged a comeback but today their survival is anybody’s guess. Short selling is among the most mentally taxing subsets of trading, according to renowned trading psychiatrist Ari Kiev. “There’s more work involved in the shorting of a stock,” Kiev explains. “To really understand why a company is no good — they have to uncover a lot more information. And it’s riskier — the losses in theory are limitless.” Kiev adds that short sellers with whom he’s spoken lately are experiencing intense pressure to take profits or bail out of risky positions amidst an environment of drawdowns and growing fear.
To hear more of Ari Kiev’s discussion of short selling click here ...
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Il guru della psichiatria Ari Kiev: dimenticano la strategia
“Panico e notti insonni così perdono lucidità” ROMA — «Sono nel panico, non stanno seguendo le loro stesse strategie». Fondatore e presidente della Social Psychiatry Research Institute,
300 trader curati e numerose pubblicazioni sul tema, Ari Kiev, conosce bene l’ansia che avvolge oggi migliaia di trader. E crede che le tecniche usate quando era consulente della squadra olimpica americana siano utili per i trader in crisi.
Dottor Kiev, come mai sempre più trader vanno dallo psichiatra?
«È vero: le visite sono in aumento. Il trading è un’attività stressante, anche quando va bene, perché c’è sempre il rischio di perdere i guadagni. Tuttavia, coi cigni neri (gli eventi altamente improbabili) di questi mesi, l’incertezza aumenta, è molto più difficile fare previsioni esatte e si finisce col perdere soldi».
Cosa avviene nella mente di un trader che perde molti soldi?
«Diventa più ansioso, meno deciso. Prende più rischi: non si libera
dei titoli in perdita e vende le azioni che lo farebbero guadagnare
».
Questo finisce per avere effetti anche sulla vita personale.
«Ci sono dati che confermano l’aumento dei divorzi, ma tra i miei pazienti non è un fenomeno in crescita. Sono professionisti, che
sanno come separare la vita privata dal lavoro. Ciò non significa che non passino notti insonni».
Come si esce da questo stato?
«Se si è in perdita, spesso è perché il mercato è difficile da
interpretare. Bisogna pazientare, aspettare un periodo che può essere
analizzato con modelli matematici. Sembra ovvio, è vero. Ma provate
voi a dire di star fermo a un trader che sta perdendo centinaia
di migliaia di dollari».
Le tecniche usate con gli olimpionici sono utili per i trader?
«Indubbiamente. Agli olimpionici, come ai trader, spiego che,
inizialmente, è bene concentrarsi su un obiettivo preciso: la medaglia
d’oro o un target finanziario. In seguito, entrambi devono
concentrarsi sul come arrivarci. È di questo secondo passo che molti
traders, oggi, si stanno dimenticando. Si concentrano sull’obiettivo finale (recuperare le perdite) e si dimenticano di come arrivarci».
Ed è più facile aiutare i trader o gli atleti?
«Gli atleti sono più abituati ad essere allenati e a capire il ruolo giocato dalla psiche. Gli arcieri, per esempio, sanno che è fondamentale abbassare il battito cardiaco quando si scocca una freccia. Alcuni trader
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;)
Business with ReutersBy Elinor Comlay ReutersPublished: July 31, 2008
NEW YORK: Wall Street is reeling from losses, and bankers are fearful of losing bonuses at best and jobs at worst. But while New York braces for the economic fallout, one group is benefiting -- psychotherapists.
Bankers suffering from anxiety or depression and looking for pills or deep therapy are making beelines for the couch. And for some it has gotten so bad they want to quit the money game forever.
"I had a guy say to me, 'I want your job," said psychologist and career coach Marilyn Puder-York.
While it is difficult to quantify demand, five therapists who serve the banking community all said in interviews their business from Wall Street is up in recent months.
Alden Cass, a psychologist and trading coach in New York who works extensively with Wall Street traders, estimated that his clients have increased by about 25 percent since March, when JPMorgan Chase & Co agreed to buy Bear Stearns and the stock market tumbled.
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Several psychologists said that the events in March led to a spike in referrals, as Wall Street professionals saw just how quickly their job security could be taken away.
"Traders are more stressed, more uncomfortable, more fearful about how the year's going to turn out, and less confident than they have been in years," said Ari Kiev, psychiatrist and founder of the Social Psychiatry Research Institute.
Kiev has been working with traders for 15 years and said this is the most stressful year for his clients he has experienced.
Typical are the traders facing losses who double their positions in last-chance bids to recoup gains -- only to face more than double the losses they had previously.
They abandon a trading strategy and become governed by their emotions, Kiev said.
"Once they are in a hole, psychologically, they start panicking," said Kiev, who notes that these traders start to doubt their ability. "They think, 'Maybe I was only successful because I was lucky.'"
NOT KEEPING UP WITH THE JONESES
This hasn't been a normal downturn on Wall Street. The year-long credit crisis has been traumatic for some bankers who have had their bank accounts, their career prospects and their self-esteem damaged.
The extent of the losses suffered by major American investment banks has put one, Bear Stearns, out of business, and led to questions about the survival of several others.
Already at least 85,258 job cuts have been announced for the financial sector this year, according to employment consulting firm Challenger, Gray & Christmas. New York State predicts that bonus payouts will fall by 20 percent for 2008.
Declining home prices in some parts of the New York metropolitan area and sliding stock prices, particularly in the banks themselves, have hurt bankers' wealth.
There was even a report they are unwelcome to apply to buy or rent apartments in some New York City buildings because of fears they will be bad credit risks.
And the therapists said many bankers and hedge fund managers that have lost substantial personal wealth are coming to them because they are also now facing divorce.
"What depresses more than loss of money is loss of prestige, loss of self-esteem, embarrassment and comparative failing in contrast with their peers," said T. Byram Karasu, a psychiatrist and Silverman Professor at the Albert Einstein College of Medicine at Yeshiva University, who has treated traders.
But all that expensive therapy isn't appealing to some of the ultra-stressed.
The classic trader personality -- aggressive, unemotional, and not prone to introspection -- can make them difficult patients.
"They want quick fixes -- and that's a problem," said Cass.
For some only the meds will do.
"They just want some medication for anxiety and then never show up again," said Karasu.
(Editing by Gary Hill)
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