Are you managing your circumstances or your peformance?

Managing circumstances is reactive, exhausting and unsustainable. It’s an incredibly inefficient use of effort and capacity.

Managing for performance keeps you creative, intentional and on the front foot. It protects you and your resources of time and energy for when you really need them and maximises the return on your time, energy and insight because you’re prepared to act with precision when it matters.

Summer months are often quieter in the markets and price action can be harder to read. It’s at times like this that traders can get frustrated at a lack of obvious opportunity in the market. This risks two common pitfalls:

1) FOMO: “I don’t want to miss out. I’ll leave this on just in case”… You put on or sit with low conviction sub-optimal trades, often in small size.

2) Desperation: “I’ve got to make some money somehow”… You are tempted into rather complex trade structures or to run through stops in an effort to wring some alpha out of the market.

Both can result in a leaky portfolio. There’s no obviously bad trade but choppy markets can shift the portfolio risk profile quite rapidly and leave complex positions illiquid, or even simpler ones quickly out of the money.

Those paper cuts and the accumulation of avoidable losses are painful. Having to react and manage these circumstances is a disheartening drain of energy for little or no real return.

So how can you ideally manage for performance at times like this?

If you’re trading less in quieter markets, take the opportunity to invest in your functional wellness. Embed sleep, nutrition, movement, mindfulness and stress management habits now. Take time to invest in community, research and thinking partners and your team dynamics. Functional wellness is essential for the cognitive and emotional hygiene you need for optimal decision making and trading well.

If there’s plenty happening but cross currents are muddying the waters, get intentional about finding and understanding the market opportunities that you can trade optimally. What can you read, research or learn now? What nooks and crannies of the market can you explore? Are there insights available from other markets that you don’t trade? How can you distil your learnings into strategic direction? Who do you need to speak with internally or externally to make sure you are ready to deploy risk appropriately and insightfully? This work nurtures your thinking plasticity - your ability to cut through the noise, think laterally and connect the dots - both now and in the busy times to come.

Intention and discipline now will put FOMO and desperation to bed and stand you in good stead to perform and not react through the rest of the year.

Ready to optimise your performance?

Park Street helps investment managers unlock sustained performance and resilience. Get in touch to learn more about how our coaching and consulting empower you to manage for performance, not just make the best of circumstances.