|What's your stress tolerance? (Credit: Mike Richey)|
Now, when I talk about "investment professionals", I should clarify. I really don't trust the stock-picking ability of anyone since the financial markets are complicated and I doubt that anyone can predict how anything that complicated will behave. Fortunately, I'm not alone in this opinion and a subset of the investment community relies on the principle of diversification of risk as a bedrock strategy for coping with the uncertainty of the markets. Through diversification, an investor can rely on historical information about the best performing investment types without putting all her eggs in a single proverbial basket.
Now let's shift gears to stress. Life activities and events are like investments. We are investing our time and attention in activities that may bring us happiness, pleasure, grief, or stress. The payouts or losses may be on the timescales of days, to weeks, to years. As an investor of our time and attention, we must weigh the probabilities of gains with the risks of losses: driving hard at work could bring promotions at the cost of personal relationships, for example.
I propose the concept of a Stress Portfolio as a strategy to balance our activities to allow both personal growth while managing the risks that come with stress, like poor health or burnout. My Stress Portfolio is a introspective sense of the balance of five components of my reaction to daily life: distress, eustress, flow, relaxation, and boredom. I think of each of these as representing a decreasing level of stress one might experience. As events happen in life both within or outside my control, I can reevaluate the distribution of my stress portfolio and "rebalance" my intensity to compensate.
What is the right distribution of stress? I think the answer to that question will vary by the individual. For example, some people are more resilient than others and may benefit from a greater allocation of activities in the distress or eustress categories. This is an interesting area for research as proper allocation of stress will determine the degree of success an individual can achieve. To much stress and a person may crumble and give up. Too little stress and a person is not challenged and may not rise to their full potential.
As a general rule, I think most of our time should be spent in a state of relaxation or flow with a decent amount of time in a state of eustress (exciting or exhilarating situations). I also don't advocate total avoidance of stressful situations or boredom (the extremes). These act as high and low intensity activities that can permit personal growth and recovery, respectively.
Until more research is done to determine the right allocation, all we can do is look within and ask ourselves what our portfolio should look like. Just like an investor must evaluate her risk tolerance, an individual must evaluate her stress tolerance to find the right allocation and maximize performance over time.