ONE OF THE reasons I enjoy working with physicians is that you are trained to think probabilistically, manage risk, and make high-stakes decisions with incomplete information. I respect that. Yet, throughout my career, I have seen many otherwise thoughtful doctors invest as if those skills don’t apply to their financial lives, opting instead to react to market noise, chase the latest hot stock, or outsource decisions without a clear framework.
This isn’t a matter of intelligence. It’s a matter of starting in the wrong place.
The most consequential investment decision you will ever make is not what to invest in. It is why you are investing at all, and for whom.
The Hidden Cost of “Interesting” Investments
Hot stock tips are seductive for a reason. They offer the promise of outsized returns, intellectual engagement, and the feeling of being ahead of the curve. For physicians, who spend their professional lives mastering complex systems, the allure is understandable. But here’s the uncomfortable truth: acting on tips substitutes activity for clarity.
A stock tip, no matter how compelling, answers none of the questions that actually matter:
- What future obligation is this investment meant to fund?
- Over what time horizon?
- How much volatility can my family realistically tolerate?
- What happens if this investment underperforms at exactly the wrong time?
Without answers to those questions, even a winning investment can be a bad decision.
In medicine, you don’t begin treatment of an individual patient by choosing a drug you heard about at a conference. You start with diagnosis, patient goals, comorbidities, and risk tolerance. Only then do you select the intervention. Investing deserves the same rigor.
Yet many physicians invert the process:
- Hear about an opportunity
- Decide whether it sounds smart
- Invest
- Rationalize afterward
That sequence would be malpractice in clinical care. In finance, it’s merely common.
Strategy Is Not About Returns—It’s About Tradeoffs
An investment strategy is often misunderstood as a plan to “maximize returns.” That framing is incomplete and, frankly, dangerous.
A real strategy is a series of explicit tradeoffs:
- Growth vs. stability
- Liquidity vs. long-term compounding
- Personal consumption today vs. family security tomorrow
Every portfolio expresses a philosophy, whether intentional or accidental. The difference is whether you chose it—or the market chose it for you.
For physicians, the stakes of unexamined tradeoffs are high. Income is often uneven, liability exposure is real, and family expectations are complex. A strategy that ignores these realities is not aggressive — it’s negligent.
Your Family Is the Ultimate Stakeholder
Physicians rarely invest solely for themselves. They invest for:
- A spouse with different risk tolerances
- Children whose futures span decades
- Parents who may need support
- A future self who may want autonomy, not maximum wealth
A hot stock tip doesn’t know any of this. A strategy does.
When markets are calm, this distinction feels academic. When markets are volatile, and they will be, strategy helps to keep families from making emotionally destructive decisions at precisely the wrong time.
The Real Risk Physicians Underestimate
Most physicians define investment risk as “losing money.” That’s not wrong, but it is incomplete. The more consequential risks are:
- Being forced to sell at a loss to meet a life obligation
- Discovering too late that assets are illiquid when flexibility is needed
- Taking risks that are tolerable on paper but intolerable in real life
Risk is the chance that money fails you when it is needed most.
A strategy aligned with your family’s goals is designed specifically to manage that risk, not eliminate it, but contain it within boundaries you understand and accept.
Why Good Strategy Feels Boring—And That’s The Point
A sound investment strategy rarely feels exciting. It feels repetitive. It feels methodical. It often feels dull. That is not a flaw.
Boring strategies work because they are robust across many futures, not optimized for a single narrative. They are designed to survive disappointment, not just reward optimism.
Physicians, more than most, should appreciate this. You don’t want a treatment plan that works only if everything goes right.
What Changes When Strategy Comes First
When you start with strategy:
- Market noise generally loses its power
- Investment decisions typically become easier, not harder
- You can say “no” to opportunities without fear of missing out
- You evaluate ideas based on fit, not excitement
Hot stock tips don’t disappear, but they are filtered. Most are rejected quickly. A few may be incorporated thoughtfully, in appropriate size, without threatening the integrity of the whole plan. That is the difference between speculation and investing.
Instead of asking, “Is this a good investment?” ask: “What role would this play in my family’s overall plan? What would I give up to include it?”
If you can’t answer that clearly, the investment is not yet worthy of your capital.
The Physician’s Advantage—Use It
Physicians already possess the skills required for excellent long-term investing: discipline, humility in the face of uncertainty, and respect for systems over anecdotes. The challenge is not learning more about markets. It is applying those skills consistently to your financial life.
Start with strategy. Let goals drive decisions. Allow investments to serve your family—not your curiosity, your ego, or the market’s latest story. Because in the end, wealth is not measured by returns alone, but by the freedom, security, and dignity for the people who depend on you.
Errata: In MD-Update #161, I reported that the QBI deduction was going to 23% in 2026. Due to a late change in the bill, it stayed at 20%. Sorry for that mix-up.
Scott Neal of Lexington, KY is a Senior Wealth Advisor of Mercer Advisors, a Denver-based financial advisory firm. He can be reached by calling 1-800-344-9098.
Investing involves risk, including the possible loss of principal. There can be no assurance that any investment strategy or portfolio management methodology will ultimately be profitable or meet its objectives.