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The Most Anxious Generation Goes to Work

New college graduates report higher levels of anxiety. How managers can help them steer past fear and improve work performance—and how young workers can work to calm their anxiety and be more effective.

Note from Cornerstone:

Over the last 15 years there has been a noticeable uptick in client conversations about the anxiety their children are experiencing. I am not an expert in this area and won’t pretend to know anything other than there appear to be a variety of behavioral and chemical challenges that can be mistaken for this feeling. But in attempting to understand what is occurring, anxiety seems to be the most common concern.

The best I can do is let concerned parents know that I am hearing about and observing more of this. Thanks to the Wall Street Journal article below, I have a little more validation. It appears that recent college graduates are the most anxious of all previous generations, and two-times greater than how baby boomers currently feel. I also understand that anxiety is not uncommon. Perhaps part of the increased reporting can be tied to a higher level of self-awareness among all generations.

While not a solution to any one client’s concerns about what this means, it does help to know that many other parents and children are sharing this same experience. I hope you find some value in the article.

Rich Arzaga, CFP®

The Most Anxious Generation Goes to Work

By Sue Shellenbarger, Wall Street Journal

May 9, 2019

Michael Fenlon’s company is one of the nation’s biggest employers of newly minted college grads. He’s watching a tidal wave approach.

College presidents and deans tell him repeatedly that they’ve had to make managing students’ anxiety and other mental-health issues a priority. “They’re overwhelmed with the demand for mental-health services on their campuses. I hear this again and again. It’s really striking,” says Mr. Fenlon, chief people officer for PricewaterhouseCoopers, which hires thousands of college grads each year.

As Generation Z enters the workforce, more young recruits are reporting anxiety than any other generation. Some 54% of workers under 23 said they felt anxious or nervous due to stress in the preceding month, according to a 2018 American Psychological Association survey of 3,458 adults 18 and over. Close behind are millennials, with 40% reporting anxiety—surpassing the national average of 34%.

One driver of the trend is that 20-somethings are simply more willing to talk about and ask for help with emotional issues.

Nevertheless, their anxiety is causing some baffling workplace behaviors—such as ghosting the boss. And employers are trying new ways to help anxious new hires stay calm, clearheaded and willing to speak up at work.

One executive was dismayed when a young employee missed two of her first five days on the job without calling in, says Adrian Gostick, a Pleasant Grove, Utah, consultant who advised the executive. In a meeting, the employee admitted to paralyzing anxiety, including panic attacks and stomach aches, says Mr. Gostick, co-author of “The Best Team Wins.” When the executive reacted with empathy, the employee seemed comforted and started showing up regularly.

Other managers take the opposite tack, using anxiety as a weapon to get employees to perform—a tactic likely to backfire, Mr. Gostick says. One in four Gen Z employees say they’d quit any company where the boss managed by fear, according to a survey of 1,000 18- to 23-year-olds by InsideOut Development.

Anxiety causes employees to withdraw, turn negative and overreact to stress. “If you suffer from anxiety, you lose focus,” says Dan Schawbel, author of “Back to Human” and a workplace researcher. “In the next one to five years, employers will start to get serious about this, because the cost to employee engagement is really high if you don’t have programs in place.”

PwC is encouraging employees to discuss mental-health issues more openly, Mr. Fenlon says. He recently did an internal podcast on getting help, and disclosed that his own mother suffered from depression. “As a kid, I never spoke about it. In retrospect, why didn’t I?” he says.

Some 13,500 PwC employees took part in a recent online meditation session. The company also is training managers in running meetings so everyone participates. This includes appointing one person to make sure reticent employees speak up.

Anxiety triggers excessive worrying, and a fight-or-flight response that can block the brain’s ability to process stimuli. Stacey Snyder, a 25-year-old business analyst, says she suffers anxiety before making presentations or getting feedback. Then she second-guesses herself afterward, thinking, “I should have done this instead,” she says.

Meditation and mindfulness training offered by her employer, Herman Miller , a Zeeland, Mich., furniture-design company, has helped Ms. Snyder be less reactive to stress. If someone asks her to drop everything to do a report right away, she takes a minute to think about the request rather than refusing on the spot. That equips her to respond calmly with a compromise offer.

Herman Miller broadened its well-being programs three years ago to increase its emphasis on mental health. The company stations social workers at its plants to offer confidential counseling, and has trained 110 employee volunteers in mental-health first aid so they can notice signs of anxiety in colleagues and offer help, says Kerri Ploeg, corporate health manager.

Among the trainees: Angie Martin, a 30-year-old proposal manager, who says she has learned to cope better with her own anxiety and empathize with others who are struggling. “I’m glad we’re talking about it and getting the tools we need,” she says.

Many managers see social media as a major cause of Gen Z anxiety, and try to create a work environment free of the social comparisons and competition it breeds. As head of human resources at Vayner Media, a global agency based in New York, Claude Silver dissuades young employees in one-on-one coaching sessions from comparing their career progress to others’.

“They’ll ask, ‘Am I getting my promotion in three months? I want to make sure I get there, because Johnny got there last month,’ ” says Ms. Silver, whose title is chief heart officer. She refocuses the conversation to their own unique strengths. She also trains managers to notice employees’ body language when giving feedback, and to use calming rituals such as a friendly handshake to ease anxiety. “I want to create a culture of belonging, where people feel physically and psychologically safe,” she says.

Research by Harvard Business School professor Amy Edmondson shows psychological safety—a shared belief that it’s OK to take risks or make mistakes without fear of being embarrassed, rejected or punished—is important in helping teams perform well. It’s even more important when working with anxious employees, says Dr. Edmondson, author of “The Fearless Organization.”

To foster a sense of psychological safety, she coaches managers to show humility, admit mistakes and avoid casting blame on individuals for systemic failures.

Research on the anxiety-inducing process of uncovering medical errors at a hospital shows team leaders must choose their words carefully, Dr. Edmondson says. “If someone calls a problem a screw-up, that makes your brain say, ‘I’d better be quiet about it.’ But if it’s called an accident, you think, ‘How can we prevent it from happening again?’ ” she says.

And rather than grilling staffers about whether they witnessed defects or hazards, appeal to their aspirations, asking, “Was everything as safe as you would like it to be?” Dr. Edmondson says.

Shifting employees’ attention to shared goals is what makes the difference, she says. “It raises creative juices, and makes people want to speak up.”

 

#CollegeEducation

#FinancialBehavior

#PersonalAdvice

 

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Key Person Insurance

A way for businesses – especially niche businesses – to address a major risk.

Who are the people most crucial to your business? Have you taken steps to insure them?

At every company, there are certain people who are essential to day-to-day operations. If they die, the business may face an operational or financial crisis.

Key person insurance is designed to help businesses deal with this circumstance. Its payout can offer some monetary relief, so that operations can continue running smoothly.

Companies purchase key person insurance for a variety of reasons. They realize that the insurance benefit could help them settle outstanding loans or pay for the recruitment and training of a new hire. Additionally, the policy may play a role in an ownership transition or an executive compensation plan. If a key person dies, the business may even want to provide their spouse or family with the equivalent of their salary for a time.

How easily can this coverage be arranged? Quite easily. In fact, any type of term or permanent life insurance policy can be structured as key person insurance. Many companies buy on price and opt for term coverage, but permanent coverage can be offered as an employee benefit, which can eventually be transferred to the insured party a nice perk for retirement.1

Key person insurance is constructed so that the company is both the policy owner and beneficiary. (It is alternately known as corporate-owned life insurance, or COLI.) As a first step, an insurer provides an acknowledgement and consent form that the business must use to legally notify the key person of its intent to buy such coverage. This form explains the coverage, and the key person must sign it before the policy can be bought.1

A good key person insurance policy should have flexible terms. It should give your business the option to raise or lower policy limits. In the case of a permanent policy, your firm should have the liberty to change which person is insured.1

Premium payments on a key person insurance policy are usually not tax deductible, but the policy payout is commonly tax free. There are no tax consequences for the insured person, unless they are named as the policy beneficiary or become its owner.1

Key person insurance may also boost your standing as you seek financing. If you apply for a business loan, you will be asked if your company has key person insurance. If it does not, the loan may not be forthcoming. Key person insurance is often a prerequisite for loans guaranteed through the Small Business Administration (SBA).1

Niche businesses arguably need this coverage the most. A software development firm, a biomedical company, or any kind of business where the owner or employees must have “expert” knowledge of a discipline or an industry, these are the businesses that may be most at risk should a key employee die.

Is your company without key person insurance? Many businesses are. While insuring a company’s information, equipment, and inventory against loss is par for the course, insuring a business against the loss of human and creative capital is not. A loss of knowledge and mastery can spell the end for a small business that has transitioned from survival to success. Look into key person coverage today, for you never know what tomorrow may hold.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – valuepenguin.com/life-insurance/key-man-insurance [5/8/19]

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Four Consecutive Months of Growth

If it seems like the financial markets have been off to an unusually strong start to the year—you are correct. The S&P 500 Index has risen for four consecutive months, resulting in the strongest start to a year in more than 30 years! To be fair, the early gains included recovery from oversold market conditions in December, but a steady combination of monetary policy, economic performance, and corporate profitability have pushed the S&P 500 to record levels.

While we’re pleased with the new highs, it’s also important to keep an eye on what could temporarily disrupt solid market performance. Three key areas when making investment decisions are market fundamentals, technicals, and valuation. A review of each suggests the market can continue to provide longer-term opportunity, but with the possibility for shorter-term volatility. In any event, it’s important for suitable investors to diversify their portfolio strategies to best take advantage of market conditions.

Market fundamentals remain encouraging. U.S. economic data have been steadily improving in recent months, with signs of stabilization in manufacturing and gains in employment, personal spending, and business investment. In addition, the Federal Reserve appears set on keeping interest rates at current levels for the near future, allowing market interest rates and fiscal tailwinds to help support domestic activity. This has been a healthy offset to concerns of slowing global growth, with a potential U.S.-China trade deal remaining the wild card.

Market technicals, which include sentiment, pricing, and volume patterns, currently indicate solid momentum, while a variety of industry surveys suggests investors have a healthy balance between appreciation and skepticism of the recent market gains. Although the S&P 500 recently hit a new high, it took more than six months to exceed its previous record set last September. Historically, when the S&P 500 has had at least a six-month “pause” between records, returns over the following 12 months were above average, which may indicate good news for summer markets.

The third important criteria is market valuation. Rather than simply looking at the price-to-earnings ratio (P/E) when making equity investment decisions, it’s also important to look at the P/E relative to the current level of interest rates and inflation, which both remain well below historical averages. As a result, although the market may be trading at record levels, it doesn’t appear to be overvalued.

It’s been quite a run for equity markets in the first four months of 2019. A quick review of market fundamentals, technicals, and valuation suggests a near-term pullback may be possible. However, suitable investors could use volatility as an opportunity to rebalance diversified portfolios or add to current positions to help work toward long-term investment goals.

If you have any questions, please feel free to contact me.

Important Information

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.

All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

The modern design of the S&P 500 stock index was first launched in 1957. Performance back to 1950 incorporates the performance of predecessor index, the S&P 90.

Economic forecasts set forth may not develop as predicted.

All data is provided as of April 30, 2019.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy. Tracking #1-849032

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Do Your Investments Match Your Risk Tolerance?

When was the last time you looked at the content of your portfolio?

From time to time, it is a good idea to review how your portfolio assets are allocated – how they are divided among asset classes.

At the inception of your investment strategy, your target asset allocations reflect your tolerance for risk. Over time, though, your portfolio may need adjustments to maintain those target allocations.

Since the financial markets are dynamic, the different investments in your portfolio will gain or lose value as different asset classes have good or bad years. When stocks outperform more conservative asset classes, the portion of your portfolio invested in equities grows more than the other portions.

To put it another way, the passage of time and the performance of the markets may subtly and slowly imbalance your portfolio.

If too large a percentage of your portfolio is held in stocks or equity investments, you may shoulder more investment risk than you want. To address that risk, your portfolio holdings can be realigned to respect the original (target) asset allocations. 

A balanced portfolio is important. It would not be if one investment class always outperformed another – but in the ever-changing financial markets, there is no “always.” In certain market climates, investments with little or no correlation (a statistical measure of how two securities move in relation to each other) to the stock market become appealing. Some investors choose to maintain a significant cash position at all times, no matter how stocks fare.

Downside risk – the possibility of investments losing value – can particularly sting investors who are overly invested in momentum/expensive stocks. Historically, the average price/earnings ratio of the S&P 500 has been around 14. A stock with a dramatically higher P/E ratio may be particularly susceptible to downside risk.1 *

Underdiversification risk can also prove to be an Achilles heel. As a hypothetical example of this, say a retiree or pre-retiree invests too heavily in seven or eight stocks. If shares of even one of these firms plummet, that investor’s portfolio may be greatly impacted.1

Are you retired or retiring soon? If so, this is all the more reason to review and possibly adjust the investment mix in your portfolio. Consistent income and the growth of your invested assets will likely be among your priorities, and therein lies the appeal of a balanced investment approach, with the twin goals of managing risk and encouraging an adequate return.

*The P/E ratio (price-to-earnings ratio) is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher P/E ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower P/E ratio. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification and Asset Allocation do not protect against market risk. Stock investing includes risk, including loss of principal.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – thebalance.com/normal-pe-ratio-stocks-2388545 [2/27/19]