Your health has a huge effect on your life and finances. Most people just think that means longevity and the emotional and financial fallout from poor health. That’s certainly true, but there’s another way that your health can dramatically affect your life. Health can affect how you think in ways that can make you a much better — or much worse — investor.
Trying to make important financial and investment decisions can be difficult at the best of times, but it can feel impossible when you’re not feeling your best. Optimizing your health can be one of the most important things to do to ensure great returns for the long term.
Poor Health Can Degrade Confidence
The best investors have the confidence to stand behind their best positions even when things are temporarily going the wrong direction. But our health can actually undermine that confidence. When we eat poorly, don’t exercise, or don’t sleep, our immune system can begin to go haywire. Gaining weight can amplify this even further, and new research is finding that air travel can cause inflammation as well.
This inappropriate activation of the immune system is what scientists mean when they talk about chronic inflammation. While inflammation can sap our energy, increase pain, prevent recovery, and even lead to an earlier death, it also creates some very interesting mental effects. It often makes us more anxious and less confident. So, if you want to have the staying power and confidence of elite investors, eating properly, working out, and sleeping can be just as important for your portfolio as for your health.
And that’s not even considering the time required to address poor health and/or obesity. If you have multiple health problems, you’re probably spending time seeing doctors and specialists and need ongoing treatments or drug regimens. That’s time you’re spending away from your investment and business activities.
Also, that ongoing slog of health concerns tends to sap a person’s confidence. While a God complex and feeling invincible aren’t the best things for investing, it’s important to feel confident in your decisions. If you don’t, then you might hesitate to act and allow profitable opportunities to pass by.
Proper Sleep Provides Mental Clarity
The best investors also see the unique opportunities and can separate the best from the look-alikes. Sleep is the master recovery tool of the body and brain. When we don’t get enough sleep, our brain and body both don’t work properly.
In particular, we lose the ability to sustain attention, retain information, and make analytical decisions without emotions overwhelming our rational side. So if you want to ensure you’re not cognitively impaired when the next amazing opportunity or blatant scam comes your way, consider getting enough sleep. For most people, this means 7-9 hours of sleep per night.
Sleep hygiene is a relatively new term that people are starting to take notice of and talk about more openly. It refers to the activities you do or don’t do around bedtime and the environment you set up for sleep, both of which can heavily impact sleep quality. There’s a difference between how many hours you are in bed and how many hours of restful sleep you get, and sleep hygiene can make a huge difference.
Multiple things can have an impact on your sleep quality, including room temperature and alcohol consumption. Another consideration is screen time. Between televisions, cell phones, and tablets, it seems like we have screens in our faces all day, and the blue light they produce can disrupt our circadian rhythm, especially at night.
Stress Creates Linear Thinking
Stress not only causes a variety of health problems, but it can actually change the way our brains operate and move us toward linear thinking. Andrew Herr, founder and CEO of Fount, studied human performance on behalf of the U.S. military for years. He often points to a specific study when explaining the difference in cognitive function with and without stress.
According to Herr, no study shows how linear people can get under stress better than a 2006 study led by Yale and special operations researcher Charles Morgan III. In it, Morgan examined soldiers before, during, and after the extreme stress of Survival School, which is where student soldiers are mock-captured and interrogated in an extremely stressful environment. What the researchers found shows how profound the effects of stress can be on cognition.
How This Study Was Conducted
To begin with, soldiers were given the Rey-Osterrieth Complex Figure (ROCF), a cognitive psychology test consisting of a complicated drawing, for 60 seconds. Then, it was taken away for 60 seconds, and they had to draw it from memory.
Researchers show a representative drawing made by pre-stress soldiers and one made by a soldier who took the test immediately after exposure to extreme stress. For the pre-stress solder, the drawing was nearly perfect. For the soldier who took the test after stress exposure, the result looked like a 3rd grader drew it. Maybe this isn’t surprising, since most people can recognize that their working memory, the ability to keep information in your head, is worse when they’re stressed.
But that wasn’t the end of the study. For the next step, researchers gave the ROCF to soldiers and had them copy it while it was in front of them. They gave them a colored pen first and then a black pen half way through so they could see the order the soldiers drew the picture. The pre-stress soldier drew the outline and then filled in the details, which represents a higher-level cognitive strategy. The stressed soldier literally went from left to right. That leads to a very interesting conclusion, which is that stress can linearize our brain.
So how could this possibly be applicable to investing? A savvy investor should be able to approach investment planning and execution with flexibility and critical thinking. Stress can cause a person to get tunnel vision and only think of sequential steps rather than the overall picture. To make the best decisions, you should have the ability to approach investments from multiple angles and devise creative strategies for handling difficulties that arise.
How To Invest At Your Best
So what tools can you use to optimize your confidence, focus, analysis, and adaptability so you have every edge for your portfolio? Activities like exercise, nutrition timing, and good sleep habits can be huge here.
Exercise
Exercise is an all around cognitive enhancer. It lowers anxiety, both immediately and in the long term, by lowering inflammation. For at least the hour after you exercise, your brain is also sharper; the circuits in your brain responsible for attention and analysis work better. And while you may release some stress hormones while you work out, regular exercise lowers stress levels throughout the day. This is especially true when incorporating cardio, but weight training is helpful as well. With regular workouts, you can keep your higher-level brain functions operating when you need them.
Nutrition Timing
Nutrition timing, or having a meal at the right time, can also be your ally. In a study with MBA students negotiating a mock joint venture deal, conducting negotiations over food led to better outcomes than negotiating without food. Studies show that if your blood sugar is lower, which can happen if you haven’t eaten recently, people tend to be more emotionally reactive. Therefore, eating a meal before or while you mull over your big bet may help you make the right decision.
Good Sleep Habits
Putting importance on your sleep quality can go a long way toward optimizing your cognitive abilities. Watching screens, especially right before bed, can make it more difficult to fall asleep. And then once you finally fall asleep, you may not be able to achieve deep, therapeutic sleep. The same problems can arise not only from screen time, but also consuming alcohol. Even if alcohol makes you fall asleep, it can cause poor sleep quality. Eliminating late evening alcohol consumption and setting a cut off time for screens are two good habits you can enact to optimize sleep. Putting those rules and boundaries in place tends to give much better results compared to general thoughts of “I should work on this.”
You can also make final decisions earlier in the day to take advantage of a good night’s sleep. According to a study on attention, adults tend to have the best memory and cognitive function in the morning. So if you’re analyzing your investments late at night, you might benefit instead from exercising good sleep habits and revisiting in the morning.
How Good Health Habits Can Yield the Best Results
And of course, good habits can compound on each other. Regular exercise not only reduces stress, but it can also help with sleep quality and reduce insomnia. All those practices added together are going to give you the best chance to make sound decisions in finance and investing.
The opposite is true when it comes to poor health habits. Chronic pain and inflammation, sleep deprivation, and complications from obesity can take a huge toll on your cognitive abilities. Trying to make well-reasoned decisions on finances and investments while you’re distracted with health concerns isn’t a recipe for success.
And assuming you’re not a health expert, making impactful health improvements might seem unattainable on your own. Thankfully, there are different levels of outside help you can enlist to help you achieve your health goals. Assistance can be as minor as a nutritionist or more frequent wellness exams. On the other end of the spectrum, there are comprehensive health coaches and organizations such as Fount. These coaches and services can guide you through blood work analysis, personalized nutrition, and supplement plans. They even offer products that can prevent jet lag to increase work performance when traveling.
Whatever type of support you choose, having an outside party help with setting clear processes and health goals is going to increase your chance of success. Also, offloading some or all of the health strategizing can open up your time to focus more on your investments and finances.
Keep Health Top Of Mind
There are times when people throw themselves into their business or investments at full force and let their health fall by the wayside. Your body might be able to keep up in the short term, but eventually poor decisions will catch up to you. To protect your investments, and the mind that oversees them, don’t push your health onto the back burner. You might pay for it in more ways than one in the future.
