What goes up may come crashing down — 5 essentials for surgeons to know about the stock market

As more and more surgeons take on a dual role as entrepreneurs, they may become increasingly interested in investing in stocks. Medical professionals and financial advisors weigh in on the essentials surgeons need to know about the stock market.

1. Surgeons may have a different set of skills. What makes for a great surgeon may not always translate to finances. Medical professionals often enlist the help of well-versed advisers in the financial market to navigate the stock market.
"Surgeons need to try to be humble realizing that their extensive training and abilities may not necessarily work out to an effective investment manager," says Robert Freedland, MD, an ophthalmologist at Mayo Clinic Health System in La Crosse, Wis. Dr. Freedland has managed his own finances for 45 years. "There are different skills involved in dealing with a compound fracture or a hip prosthesis compared to picking and managing an investment portfolio."

Surgeons are often pressed for time and may not have ample time at the end of the day to learn the ins and outs of the stock market. A financial advisor may prove to be beneficial for surgeons when devising an investment strategy.

 "Understanding the capital markets and the financial planning strategies that would benefit someone's specific needs and goals is a full time job in and of itself," explains Steven Potter, a director at Sullivan, Bruyette, Speros & Blayney in McLean, Va. "Working with a financial planner would not only relieve that requirement from a surgeon, but would introduce a resource that is more knowledgeable and experienced in these matters, which would increase the probability of success."

2. Patience is a virtue. Surgeons often have to act quickly, especially when dealing with very intense, time-sensitive procedures. This is not always true of the stock market, and waiting it out may be the best way to maximize potential profits.
"Keep a long term view of the stock market," says Joe LaScala, financial advisor with Aegis Capital in New York. "Over time, stock market returns have been consistently good, so pay less attention to the daily ups and downs and more attention to creating a plan of consistent investing and keeping with it."

3. Understand the risk. The stock market is a risky business. Sometimes, with great risk, comes great reward, but not always. When investing in stock, surgeons should weigh the possible gains and losses.

"Surgeons should understand the risks and how one would react to the risks playing out in their investment portfolios,” says Mr. Potter. "This is critical in constructing a long-term investment plan that a surgeon can stick with through good and bad markets."

4. Separate the market from the medicine.  "Surgeons may be entrepreneurs and active investors in companies either in start-ups or as passive investors," says Dr. Freedland. "It is incumbent upon them to separate out their investment activity from their medical decisions to act always in the patient's best interest."

5. Diversify your portfolio. A financial advisor will have a comprehensive understanding of the different types of stocks, inside and outside of the healthcare sector. A financial advisor may serve as a great resource when a surgeon wants to diversify his/her stock.

"Many of the healthcare companies that develop innovative technologies and remedies in medicine raise capital through the stock market," says Clint Gautreau, financial advisor at Horizon Wealth Management in Baton Rouge, La. "Surgeons should know that the stock market is a great place for them to diversity and grow their wealth by buying into companies and industries outside of healthcare." 

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