Why physicians should leave investing to the experts

Physicians tend to devote such long hours to their profession and are notorious for not being the wisest of businesspeople and investors. So there is much physicians can learn from Michael's lucky experience.

This story involves two of my friends who are ophthalmologists. To protect the innocent, I will refer to them as Sergio and Michael. Both of these gentlemen are brilliant doctors, excellent surgeons, and department chairs. Like all ophthalmologists, they are also attractive and were highly sought after before marrying roughly 30 years ago.

Sergio married a lovely woman, Rachel, whose background was in finance and accounting. Over the years, Rachel proved herself to be a gifted investor, and Sergio gives her full credit for growing his unspent earnings into a considerable sum that will more than provide financial security for the couple and their family. While Sergio continues to work, for many years now he has done so because he enjoys his career and not because he needs the income.

A stock, not a bond

Michael told me the following story. Neither he nor his lovely spouse had great track records as investors. So one day, when Michael overheard Rachel talk about her recent investment in a certain company (let us call it Widgets Inc.), he promptly purchased a large amount of that company’s stock. Sure enough, over the next few months the stock price surged by 40%, representing the best performance of any investment in Michael’s life.

Expressing his gratitude to his friend, Rachel, Michael told her about his windfall and thanked her for the tip. Rachel’s response caught him off guard. “You bought what?” she exclaimed and laughed. “I would never recommend buying Widgets stock. I was purchasing the bonds of that company.”

Sure enough, after Michael sold the stock and pocketed his large gain, the stock price faltered and has since gone nowhere. Not having a fragile ego, Michael tells this story and laughs at himself (but does so while at his beautiful vacation home in a lovely beach town—purchased, perhaps, with his gains from this investment?).

Physicians tend to devote such long hours to their profession and are notorious for not being the wisest of businesspeople and investors. So there is much physicians can learn from Michael’s lucky experience. The main takeaway for me is that I should always double-check with Rachel before making any investments.

Peter J. McDonnell, MD, is director of the Wilmer Eye Institute, Johns Hopkins University School of Medicine, Baltimore, Maryland, and chief medical editor of Ophthalmology Times.