Most of the focus on COVID-19 has understandably been on its physical impact, but the psychological impact of a pandemic is also worth considering. Social interaction is a huge source of psychological wellbeing, and its loss, paired with concerns about the market, as well as the health and wellbeing of  loved ones, can begin to take a psychological toll.

The RAIN model is a simple, four-step process for managing periods of acute stress. The model was  created by Michele McDonald and the four steps are as follows.

Recognition – This is where we deliberately observe and label what is going on in our mind and body. For instance, “I feel my mind racing.” There is a saying in psychology: “feelings buried alive never die.” It can be tempting to want to push all our fear and stress to the bottom right now or deny it exists at all. Owning a stressful feeling though is not the same as being owned by it, as we will soon discover. Tell the truth to yourself and others; this stuff is scary.

Acceptance – Next, we acknowledge and accept the presence of whatever we observed above. We don’t  have to love it but fighting against it or denying it will compound the problem. The paradox of negative emotion is the more we resist it, the more it finds us.

Investigation – Third, we must ask ourselves what stories we are telling ourselves and examine their usefulness and veracity. During stressful times, it can become easy to “catastrophize” or fast-forward straight to the worst-case scenario. If you tell yourself a cataclysmic story, you should gently challenge that thinking and try to imagine other, more positive and measured outcomes. The human tendency is to think “all that is now is all that will ever be” when history has confirmed and re-confirmed the truest words in life and investing are “this too shall pass.” As a nation, we have encountered and will continue to encounter difficult times, and this is no different.

Non-identification – The final step is perhaps the most powerful. Now that you have recognized, accepted, and identified your stress, you realize you are more than your emotions. You can experience a feeling without necessarily having to act on it. In fact, it’s exactly what we ask of ourselves and investors  when we ask them to stay the course and keep a long-term perspective: “feel the fear and do it anyway.” You can be angry without being violent. You can be sad without being incapacitated. You can be scared about what is rightly frightening news without allowing it to destroy your ability to lead at home and at work.

We can all emerge from this uncertainty with greater perspective and a redoubled commitment to do what is right, but getting there will take a daily commitment to self-care. Investors should continue to seek guidance from their financial advisor to act as both a behavioral coach and a trusted resource to help them meet their financial goals. The RAIN model provides a framework for advisors and clients to help manage uncertainty together in the weeks ahead.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, a registered investment advisor.

Tagged: Dr. Daniel Crosby, behavioral finance, COVID-19