We've already seen some disappointing results from the Sochi Winter Olympics.
Athletes which were supposed to finish first and crush the competition instead didn't even make it to the podium.
Take Bode Miller. The guy is described as the "most successful male American alpine ski racer of all time" (from Wikipedia).
So naturally we expected him to finish first in the downhill event.
Instead he landed in eighth place.
In sports no one even remembers who finished second.
The attitude is "first or worst."
It's kind of the same way when I see physicians managing investments on their own.
And it usually gets you into big trouble.
You see, unlike the Olympics, you don't have to be the "best."
What I mean by that is you tend to focus on beating the competition though higher investment returns than the market averages.
Or bragging to your colleagues about some of the home runs you've hit in your retirement portfolio -- while conveniently neglecting to tell them about all the investment bombs that exploded on you.
Or boasting about the really cool and sophisticated investment strategy that your financial advisor sold you on -- while at the same time not really understanding what it is.
(Does your financial advisor even understand it?)
I think we're wired this way.
After all you can't be a moron to get through college, get admitted to medical school, and develop meticulous skills during residency training.
So naturally that's transferred into our desire to be the best at investing.
But to be a successful investor, good is good enough.
Ironically many doctors I meet try to be the best but instead end up more towards the worst.
And many physicians hire financial advisors with the hope that the financial advisor has the skill to beat all of the other universe of investors in the market.
But even if you or your advisor beats the market averages, it's likely due to luck not skill.
It's sort of like throwing yourself into the downhill skiing competition at the Olympics.
The competition is so fierce that it's better to watch the event on TV rather than get slaughtered on your way down the hill.
I suppose there's an itsy bitsy teeny weeny chance you'd beat the likes of Bode Miller.
But it's more likely you'll end up with a femur fracture.
Here's how to start avoiding that possibility:
Talk again soon.
Setu Mazumdar, MD, CFP®
"The Financial Planner For Doctors"