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A Four-Step Approach to Coping with Stress

March 12, 2025

Stress comes from external pressures, perception, and response. CKGSB Professor of Accounting and Finance and Director of the Investment Research Center, Liu Jing, outlines a four-step method to manage it: identify causes, separate controllable factors, build a system, and focus only on what can be changed.

American experimental psychologist William James once said: “The most powerful weapon against stress is our ability to choose ideas.”

­Stress has three sources: environmental changes, negativity towards change, and mental perception.

Environmental factors are the material basis for stress, whether generated outside or inside. Wild beasts encountered in the wilderness, picky leaders in business, strict parents at home or fluctuating prices in finance. These are external stressors. Physical pain and discomfort, regret and heartache, and worry and fear are all internal factors. Positive environmental change tends to make people feel better, while negative environmental change brings on stress.

But no matter how negative environmental conditions are, as long as the information does not reach the brain, it will not cause stress. Once the brain receives the negative information, it stimulates a series of negative emotions: pain, sadness, fear, anger. These are all sensory reactions of the brain, not the stress itself.

Negative information can be received in different ways. For example, if you encounter a wild beast, you may think you are going be eaten. If you don’t do your job well, you may think you are going to be fired. If you don’t pass your test, you may think you are going to be scolded. If stock prices drop, you may think you are going to be forced to sell up, resulting in permanent losses.

Avoiding thinking about these potential pain points as the cause of psychological stress. The pressure they exert on us helps us react to negative environmental changes and act to reduce or avoid their negative impacts. Without pressure, people resign themselves to fate and have no initiative.

Pressure is therefore meant to make people uncomfortable. If they feel comfortable, pressure cannot do its job.

But sometimes, pressure stops people responding rationally and positively.

It may be hard to find a solution under pressure, so people tend to focus on negative environmental changes and the emotions that arise instead of dealing with them. These negative emotions deteriorate the internal environment, causing emotions to spiral, eventually ending in depression.

Zheng Banqiao of the Qing Dynasty proposed “confusion” as a method to deal with stress. Following the underlying idea of ​​this method, it leads to a Buddhist “empty and pure” state or to a Daoist “Tao follows nature” state.

It is not difficult to see that these methods are ultimately trying to block the direct effects of environmental changes on the brain. The idea is that blocking out the trouble means people can be calm even when “Mount Tai collapses” in front of them. However, it is extremely difficult to achieve such a state of mind. People have seven emotions and six desires, pursue fame and fortune, and want to prolong their lives and live for a hundred years. Letting everything go is simply not human. The bigger problem is that although this way of thinking can relieve stress, it does not alleviate the negative changes in the environment. Therefore, it only solves the psychological problem but not the practical one.

Can we alleviate psychological and practical problems at the same time? We need to first realize that the source of stress is the negative changes in the environment, and a degree of pressure is warranted. This takes us out of the vicious cycle of stress.

The first thing is to analyze the source of negative changes. For example, why do high school students feel stressed? Is it because they did not do well in the most recent exam, or have not made any progress in their studies? Is it because the expectations of their family are too high, their own expectations are too high, or the expectations of their teachers are too high? Is it because the classmates who compete with them have made significant improvements recently? Is it because they have to date while under great pressure in their studies? All these things can bring stress, and only by finding the root cause can we deal with it.

After finding the source of negative changes in the environment, the second step is to split it into controllable factors and uncontrollable factors. Controllable factors are not necessarily 100% controllable, but can be influenced by action. The same goes for uncontrollable factors.

We need to first realize that the source of stress is the negative changes in the environment, and a degree of pressure is warranted. This takes us out of the vicious cycle of stress.

Controllable factors are easy to understand, for example, the degree of effort of high school students in studying is controllable, the behavior of discussing with leaders when work cannot be completed is controllable, and the behavior of seeing a doctor when sick is also controllable. Controllable factors are all current behaviors, and uncontrollable factors belong to the category of the past and the future. For example, a person suffered a major loss in the past, causing pain. But the past is over, leaving us unable to control the event.

Another situation is that a large amount of investment was made in something in the past, and now these investments have lost value in the market, but when there are better opportunities, they are unwilling to replace them because they do not realize that the past investments are so-called sunk costs and should not affect current decisions. If sunk costs are evaluated as valuable assets, the pressure is naturally great because the psychological loss will appear to be very large.

Another uncontrollable factor comes from the future. The world is uncertain. What happens in the future has predictable and controllable components, as well as a luck component, which can be quite considerable. People often make the mistake of confusing the two and seeing the world as certain. The source of this error is that people see that through personal efforts, they can not only improve future expectations, but also reduce future uncertainty.

For example, if a basketball player practices shooting, if he trains hard, he can not only improve his average score, but also reduce the volatility of his score. But this is because shooting in a static state is a simple system in itself, with rules to follow and little uncertainty. The real world is more like a dynamic game of basketball. What can be controlled is training, strategy, and fighting spirit, but luck is indispensable.

Therefore, past sunk costs and future luck are both uncontrollable. If a person tries to save the former or control the latter, he will definitely face huge pressure and deform his movements.

After confirming which factors are controllable, the third step is to design a system to improve these controllable factors. Just like a pilot flying an airplane, he must check and test the airplane according to the operating procedures before taking off. This system targets controllable factors. Although it cannot completely eliminate the possibility of a plane crash, it can reduce the risk to the lowest point. With a reliable system, natural psychological pressure can be greatly reduced.

The last step is to forget about uncontrollable factors, and take action on controllable factors. This is easy task, and requires a change in worldview: from a person who pursues perfection to a person who accepts imperfections but tries their best.

In this four-step process, each step will relieve stress. As analyzed above, external pressure easily flips into negative internal environmental factors and spirals out of control until it becomes stress. The trick to breaking this vicious cycle is become active in injecting positivity. Then you can see more clearly that the parts subject to change are much smaller than it might feel, thus reducing pressure. The role of positive action is turn things around by changing one’s perspective on the status quo, reducing pressure.

Pressure pushes people to sadness, but it can also help them progress. The important thing is to turn pressure into motivation without allowing it to overwhelm them on the way.

This article was translated from the original Chinese article, which can be found here.

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