PMs - Techniques for managing stresses from PNL swings
It took me a while when I first took on a PM role to determine the cause of any stress that I took on from PNL swings and then take the appropriate actions to mitigate them. I thought it would be an interesting exercise to hear from other PMs on their experiences to benefit future PMs when they are in the same situation.
Regarding my experience, I found myself, on an almost daily basis, doing the constant arithmetic of implied end of year compensation and the lifestyle changes that could facilitate. The constant goalposting meant that I would inevitably feel quite deflated on a day where there was a decent drawdown. Despite discovering this issue early on, I found it hard to mentally re-wire myself to permanently not think this way so I took the inverse approach of investing PA in a dividend/coupon clipping portfolio that generated the same amount of annual coupons/dividends as my annual expenses so that I can mentally tell myself that any future compensation is not a necessity. It's not ideal from a return maximizing perspective but I like to think that it has helped my mental health in this role.
I'm genuinely curious to hear from other PMs on their experiences and how they tackled them.
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