The stock market is bumpy. So what's the average physician-investor to do? According to most financial experts, the best thing to do isâ€"nothing. The key to making money in stocks lies in understanding their long-term nature and accepting the good times and the bad. Steady your nerves with "The Doctors' 7 Investment Principles."
Intelligence is not a factor for explaining wealth. Those with low intelligence should not believe they are handicapped, and those with high intelligence should not believe they have an advantage.”—Professor Jay Zagorsky
The stock market is bumpy. So what’s the average physician-investor to do? According to most financial experts, the best thing to do is—nothing. The key to making money in stocks lies in understanding their long-term nature and accepting the good times and the bad. Steady your nerves with “The Doctors’ 7 Investment Principles.”
1) Remain calm—Don't run with the crowd and jump in and out of the market. If you have a well-planned, well-positioned stock portfolio, history is on your side. The record is clear—stocks outperform all other investment classes over the long term.
2) Concentrate on the company—If the underlying company maintains its value and principles, don't let a market drop—big or small—scare you into selling. Remember Warren Buffett's advice: "If you aren't willing to hold a stock for 10 years, don't even own it for 10 minutes."
3) Buy more—Market corrections or down periods are the best times to find bargains and add to your stock portfolio. When the all-but-certain rebound comes, you will have fortified your investment.
4) Step up in class—Corrections or downturns also are a good time to shop around for top-notch companies that prove they can weather the storm. Gravitate toward companies that grow in good times and bad.
5) Spread it around—If a market slump does nothing else to guide physician-investors, it underlines the critical need for portfolio diversification. Successful physician-investors spread out investment risk by holding a sensible balance of growth and income assets.
6) Trust sound advice—If you have a financial advisor with whom you've built a satisfying relationship, pay heed to their guidance and counsel. A good money advisor will always deliver a balanced mix of good and bad news.
7) Keep taxes in mind—Taxes may dissuade you from pulling out of a market gone sour. If you sell or get out of the market altogether, you face capital gains taxes on your profits. This holds true even with the new tax laws on stock investments.
$5 million—Estimated savings required to live “comfortably” in retirement according to financial advisors.(Fortune)