Every advisor recognizes that a reasonably optimistic outlook is among the most important traits we can bring to the job, the necessary first step that makes everything else we do possible.These days, we need to put explicit strategies in place to stay motivated - for most of us, motivation doesn't happen unless we make it happen.

We also need to tap into new research on ways to keep an optimistic frame of mind - an example of this research was the topic of my June column in Investment Executive, featuring the work of Dr. Martin Seligman, who ten years ago authored a book called Learned Optimism: How to change your mind and your life.

Seligman's research has shown that optimism isn't just something that we're born with - rather we can develop the skill of maintaining a positive point of view even in the face of difficult circumstances.

Underpinning his theory of "learned optimism" is the notion that each of us develops either a pessimistic or an optimistic outlook. This outlook is not set in stone - rather it can be changed.

This arises from Seligman's analysis of people's "explanatory style" - how we explain negative events to ourselves. When something negative happens, as it inevitably will at some point, how we respond is a function of the extent to which we view the event on three key dimensions.

Permanent - Pessimists believe negative events will be permanent, while optimists believe that they will be temporary.

Pervasive - Pessimists believe negative events are universal, affecting everything they do. Optimists believe them to be specific and limited to individual circumstances.

Personal - Pessimists believe they are entirely responsible for negative events. Optimists tend to assign at least part of the responsibility to events beyond their control.

Seligman has isolated optimistic behavior as one of the defining characteristics of successful people. Using various techniques he's developed, he predicted elections by analyzing each candidate's explanatory style - generally, the most optimistic candidates win. (Ronald Reagan is a classic example of this.)

If you can make your explanatory style more optimistic, you'll create more positive energy and hope for yourself, no matter how difficult or negative the circumstances with which you must deal. And by presenting a more optimistic outlook, you'll be someone that existing and prospective clients are attracted to and feel better working with.

At the core of learned optimism is one powerful principle:

Your thoughts influence your feelings and your actions - and you can choose your thoughts.

To read more about exactly how to make this happen, go to Investment Executive
01 Jun 2009