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Leading in a Bear Market

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Leading in a Bear Market

By Ryan Gottfredson– author of Success Mindsets. 

Over years of working with organizational leaders as a leadership development researcher and consultant, one thing that I have learned is that organizational leaders generally want to have a positive impact on those that they lead. They recognize they are in a unique position to positively shape and impact the lives of others, and they generally want to make the most of it. Stated differently, they want to live up to their ideal self to have their ideal positive influence.

But, actually having a positive influence is easier said than done, especially when the economy is not going well.

In fact, my heart goes out to all organizational leaders whose organizations are being negatively impacted by cancelled events and travel restrictions. Some businesses are losing incredibly meaningful sums of money that they were counting on. Many people are losing their livelihood and likely their businesses.

And even more broadly, with a slow down in money being put into the marketplace, we are seeing large hits in the stock market, essentially putting us in to a “bear market,” which is either currently affecting or will be affecting essentially all organizations.

It is during times like this that are truly going to test leaders.

Leading in a Bear Market

Leading during a slowing economy is difficult because the reality is that while leaders want to have a positive impact on those they lead, they are feeling a significant amount of pressure to protect themselves and their organization, which can come at the expense of those they lead.

Stated differently, truly effective leadership is hard when times are good, but it is even more challenging when times are bad because when times are bad, leaders face great pressure to protect themselves and their investments.

How Can Leaders Rise Above the Negative Pressures They Face?

The primary topic that I research is mindsets. Mindsets are the mental lenses that we use to see and interpret our world in unique ways. They are the reason why two leaders can see the same situation (e.g., a bear market), yet see the situation different (e.g., a problem versus an opportunity).

Fortunately, there has been 30+ years of academic research on mindsets that helps us to identify what mindsets leaders need to adopt in order to lead effectively, especially in a bear market, in order to have the positive influence that they innately want to have.

There are four sets of mindsets we need to consider. Each set ranges on a continuum from negative to positive.

Four Sets of Mindsets

Four Sets of Mindsets

 Four Sets of Mindsets

Fixed and Growth Mindsets. A fixed mindset is the belief that you and others are unable to change your talents, abilities and intelligence. It differs from a growth mindset, which is the belief that you and others are able to change your talents, abilities and intelligence.

Since those with a fixed mindset do not believe that they can develop, they are inclined to internalize failure. Thus, they prioritize protecting and advancing their image.

Since those with a growth mindset do believe they can develop, they care less about their appearance, and more about their growth.

Over 30 years of research on these mindsets indicates that those with a growth mindset are going to navigate change and crises (i.e., bear market) much more effectively.

Closed and Open Mindsets. When leaders possess a closed mindset, they are not open to the ideas of others, often because they believe that what they know is best. When they believe that what they know is best, their primary focus is on being seen as right.

Leaders with an open mindset are open to the ideas of others and are willing to take those ideas seriously. This is because they acknowledge that they do not have complete information and can be wrong. With an open mindsets, leaders are not concerned about being seen as right; rather, they are focused on finding truth and thinking optimally. Because of this, they are more comfortable with ambiguity, more open to learning, and are more likely to make better decisions in a bear market.

Prevention and Promotion Mindsets. Leaders with a prevention mindset are focused on not losing and avoiding problems, while leaders with a promotion mindset are focused on winning and gains.

Leaders with a prevention mindset are primarily concerned about avoiding discomfort. As such, they are focused on avoiding problems, not taking risks, and maintaining the status quo. Leaders with a promotion mindset are focused on what is truly important: reaching a specific goal, objective or destination. As such, they anticipate problems, are open to take risks (believing that without risk comes no rewards) and seek to advance rather than maintain the status quo.

The ultimate difference between these two mindsets is that leaders that have a prevention mindset run from the problems associated with a bear market as a way to stay safe, even if it means walking away from goals. Leaders that have a promotion mindset are willing to face the challenges of a bear market, prepare for them, and take them head on, always looking for opportunities to advance closer and closer to their stated goals.

Inward and Outward Mindsets. Leaders with an inward mindset see the people they work with and serve as objects. Leaders with an outward mindset see them as people and valuable partners.

When employees have an inward mindset, they see themselves as being more important than others. This causes them see the people they work with and serve as objects.

When employees have an outward mindset, they see themselves as equals of, if not inferior to, their followers. This causes them to see the people they work with and serve as people and valuable partners.

Often during a bear market, leaders are inclined to take on an inward mindset and inclined to make decisions that make them feel more secure, even if it comes at the expense of those they lead. To navigate such an environment in a manner to have a positive influence, leaders must develop or maintain an outward mindset.

What Mindsets do You Have?

Do you have the mindsets necessary to lead effectively in a bear market? To help you answer this question, I have developed a free 20-question mindset assessment: https://ryangottfredson.com/personal-mindset-assessment. It will provide you with an individualized and comprehensive mindset report, including directions on how to improve your mindsets. As you awaken to the quality of your current mindsets, you will enhance your self-awareness and become empowered to become more of the leader you want to be and have more of the positive influence you want to have.

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Reuters Events Launch Global Investment Summit Online Edition Uniting Institutional Investors, Asset Owners & Financial Institutions

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Reuters Events – today announced the agenda for their Global Investment Summit (Dec 3rd -4th). The 2-day strategic summit has been reimagined in the era of social distancing and will be broadcast free of charge to the public.

This Summit, with a diverse range of international voices and anchored by Reuters News-led sessions, is the only place for institutional investors, asset owners and financial institutions to come to terms with the events of 2020.

Click for more information and for complimentary registration to the online edition

The Energy Transition team report an industry leading speaker faculty for 2020, including:

  • Eileen Murray, Chair, Finra
  • Philip Lane, Chief Economist, European Central Bank
  • Gregory Davis, Chief Investment Officer, Vanguard
  • Hanneke Smits, CEO, BNY Mellon Investment Management
  • Pascal Blanque, Chief Investment Officer, Amundi
  • Desiree Fixler, Group Chief Sustainability Officer, DWS
  • Joe Lubin, CEO, Consensys
  • Bahren Shaari, CEO, Bank of Singapore
  • Mark Machin, CEO, Canada Pension Plan Investment Board

The agenda released by Reuters Events Investment is both ambitious and comprehensive, and will cover four key themes: Market Outlook, Asset Management Strategies, Industry Deep-Dives and the Future of Investment.

View the full agenda here

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Halliburton & Baker Hughes CEO’s join Reuters Events: Energy Transition 2020

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Reuters Events – today announced that CEO’s of two of the world’s leading energy service companies, Halliburton and Baker Hughes, will join the speaker faculties for their flagship Energy Transition Summit.

The event will explore the creation of the future energy ecosystem and offer companies, from across the asset spectrum, a definitive guide to their net-zero strategies. The alignment of the two biggest O&G global service companies, Halliburton and Baker Hughes, represents a significant step in the transition to low-carbon energy

More information on the Europe and North America editions can be found below. Registration for the LIVE stream is free.

Alongside their CEO speaker representation, Halliburton join as Platinum sponsors of the North American edition. Baker Hughes join as gold sponsors for the European edition of the flagship energy transition program.

The Energy Transition team report an industry leading speaker faculty for 2020, including:

  • Lorenzo Simonelli, Chairman & CEO, Baker Hughes
  • Jeff Miller, CEO & President, Jeff Miller
  • Tristan Grimbert, CEO, EDF Renewables
  • John Pettigrew, Chief Executive, National Grid
  • Pratima Rangarajan, CEO, OGCI Climate Investments
  • Alex Schneiter, CEO & President, Lundin Energy
  • Gretchen Watkins, President, Shell Oil Company
  • Calvin Butler Jr., CEO, Exelon Utilities
  • Francis Fannon, Assistant Secretary ERB, S. Department of State
  • David Lawler, Chairman & President, bp America
  • Andreas Schierenbeck, CEO, Uniper

More information on the Europe and North America editions can be found below. Registration for the LIVE stream is free.

Governance & Cooperation – Does the energy transition face a ‘governance deficit’? To understand how the energy transition will develop over the next decade, it is crucial to understand the driving governing forces behind it. Will the Green Deal provide the first domino, how can we ensure progress in the shadow of Aberdeen and ensure that we translate targets into action?

Financing Energy Transition – We must address the elephant in the room; who is going to pay for it all? An understanding of where the funds are likely to come from is key to staking claim to the infrastructural projects that will redefine the modern world in the 21st century.

New Energy Infrastructure – Low-carbon energy supply and consumption will need a radical overhaul of infrastructure. As well as revamping the old, we’ll need entirely new assets and new systems of energy delivery. It’s an unprecedented opportunity with estimated spending at $70 trillion over the next decade. Knowing which technologies are ready to be scaled first is the key to understanding opportunity

Business Model Innovation – Who will provide leadership through the age of transition and how do we want our future energy system to look? Speed and timing will be crucial if you are to stay on the right side of the transition. Join us in setting business led, evidence based, targets as industry drives towards net-zero

More information on the Europe and North America editions can be found below. Registration for the LIVE stream is free.

At Reuters Events, we’re committed to tackling the Energy Transition head on; to shed light on the defining issue of our time and help energy companies meet a uniquely difficult challenge. That is, to be both an energy company of today, and the energy companies of tomorrow. In a period that will be defined by uncertainty we can, together, lighten the way forward.” – Owen Rolt, Head of Energy Transition, Reuters Events

Contact

Owen Rolt

Head of Energy Transition

Reuters Events

UK: +44 (0) 207 375 7596

E: [email protected]

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COVID-19 is changing people’s preferences when it comes to BTL investments

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COVID-19 is changing people’s preferences when it comes to BTL investments 1

By Jamie Johnson, CEO of FJP Investment

Throughout 2020, investors have had to navigate increasingly treacherous and volatile market conditions as a consequence of the COVID-19 pandemic. No country has been immune to the coronavirus outbreak, particularly here in the UK.

Yet even as the country enters another phased lockdown of sorts, demand for UK property has remained strong. After a brief period of suppressed demand after initial lockdown measures were introduced in late March, the UK’s implementation of the stamp duty land tax (SDLT) holiday triggered a rush in demand for bricks and mortar. As a result, both house prices and transactional activity is rising.

With this new surge in demand resulting in an 18-year-high of UK house price growth, according to the Royal Institute of Charted Surveyors, buy-to-let (BTL) investments have also substantially increased in popularity.

It’s easy to understand why. BTL investments offer landlords both long-term capital growth and regular returns in the form of rental payments. And now, as the SDLT holiday deadline beckons closer, investors keen on taking advantage of the comparative discounts on offer must act quickly.

My advice to those considering a BTL investment in the UK is to understand and appreciate the longstanding market changes that have been brought about by COVID-19. Traditional BTL hotspots are being challenged by a rise in tenant demand for real estate in up-and-coming cities and regions.

For example, the COVID-19 pandemic has resulted in the majority of the workforce working remotely from home. Recent data from property listing site Rightmove makes clear the shift in demand away from central London and towards less densely populated regions; with areas like Cambridge and Oxford seeing 76% and 64% more rental searches respectively and searches in areas like Earl’s Court dropping by 40%.

This is the clear result of previously London-based professionals realising the benefits of working from home. As businesses identify the financial drawbacks and COVID contagion risks of having all their staff physically present five days a week, employers will seek out smaller commercial workspaces.

At the same time, we are also seeing workers looking to rent larger, cheaper properties that might be further away from their office. This is due to the fact that they are unlikely to need to commute every working day to their office, even once the COVID-19 outbreak has been contained.

But, where exactly are the best larger, cheaper properties to be found? Where are the UK’s emerging BTL hotspots that need to be on the radar of prospective investors? I explore these pertinent questions below.

Liverpool life

Those who have been closely following the UK’s housing market will know just how primed Liverpool is for BTL investment. As a key recipient of the UK Government’s Northern Powerhouse funding, and with massive developments like Liverpool Waters and Wirral Waters soon to be completed, the city’s housing supply is ready to meet the demands of those taking part in the aforementioned London professional exodus.

With Liverpool constantly ranking No.1 in rankings of UK cities for BTL investment, it’s evident why investors would be keen on completing purchases of Liverpool property before the end of the SDLT holiday. Though even after the SDLT holiday ends, there’re still plenty of reasons to be optimistic about Liverpudlian BTL investment. Prime Minister Boris Johnson’s government is firmly committed to ‘levelling up’ the North of England through regional regeneration, and planned high speed rail connections between Liverpool and other northern cities will only add to the investment potential of the city.

Leeds living

Although Liverpool boasts the highest rental yields for BTL landlords in real terms, Leeds was recently named the most profitable city to become a landlord in the whole of the UK by CIA landlord. By evaluating numerous metrics; including mortgage costs, average rent, average monthly landlord costs and average property prices, they determined that Leeds was the best city for potential buyers to make their first foray into BTL investment.

And, looking at recent trends, it’s easy to see why. Leeds may benefit more from the London exodus than other cities due to its unique position of being a brain gain city’, i.e. one where more students remain after graduation than move away. As a result, it boasts the largest financial services sector in the nation after London, making it an ideal locale for employers in the financial services sector who are seeking cheaper commercial rent outside of London; likely bringing investment and employees with them.

With its strong urban economy likely to be bolstered by its designation as a ‘Northern Powerhouse’ leading business hub, Leeds is ideally positioned for BTL investment over the long-term.

Cardiff’s regeneration

And finally, the capital of Wales brings much to the table when deciding between different BTL investment destinations. With a metropolitan area population of over 1.1 million residents, forecasted to grow by 20% by 2035, demand for property in the city is set to rapidly increase over the next decade. Those able to capitalise on this population growth will be able to access considerable long-term investment opportunities – as recent reports suggest.

Thankfully, it’s unlikely that there’ll be any shortage of housing supply in Cardiff for BTL investors to invest in. Cardiff Bay has emerged as Europe’s largest waterfront development, and the upcoming Central Quay and £500m coastal developments will assist in attracting further investment into the city.

BTL remains a sound investment opportunity

COVID-19 has made evident just how resilient British real estate is as an investment asset. By offering the best of both worlds, namely long-term capital growth and regular rental returns, BTL has successfully remained an attractive and popular investment choice. And, with demand for housing still outstripping supply, the market need for rental accommodation looks set to only grow.

COVID-19 has permanently changed the UK’s housing market and, as explained above, new BTL hotspots are surely due to emerge over the next year. With renters seeking out larger homes in cheaper areas, flexible working patterns will forever change the landscape of the UK’s residential real estate market, and those able to capitalise on it may benefit hugely as a result.

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