Where’s the smart money going in 2019? What will be the hottest stocks, and how can you get on board now to make a killing in the market next year?

Most physicians don’t know this, but there is a surefire way to make a small fortune in the stock market. How? Start out with a large fortune and play the stocks, suggests W. Ben Utley, a Certified Financial Planner with Physician Family Financial Advisors, Eugene, OR, a firm that specialises in investing for doctors.

Financial advisors, just like physicians, have best practices. Buying the latest tech IPO that’s predicted to skyrocket, for example, is not your best bet. “Buying ‘hot stocks’ is not a best practice,” Utley told MDLinx. “It’s a sure ticket to lose your shirt.”

Healthy living, healthy investing

Another way to look at it: Investing in a hot stock is like jumping on the latest fad diet. (Maybe it’s worse because your body can recover from a fad diet. Your bank account might not be so lucky.) But fad diets never work in the long run. What does? Eating healthy and staying active.

“When you go to the doctor, they’ll tell you to stop smoking, drink more water, get exercise daily, eat a balanced diet, and floss—and you don't want to hear that,” Utley says. “But it’s the right advice because it works.”

Same thing goes for financial planning, he adds. It may sound as boring as doing low-impact aerobics and eating enough fibre, but diversified investing for the long haul—with an eye toward retirement and paying for college—is the closest thing to a sure bet in the stock market.

Once physicians understand this fundamental concept, they can get to know some of the finer points:

1. Don’t invest for 2019. “There's a perception that just because the New Year comes around, we should make new investments,” Utley says. “Well, there's no way to know what the economy is going to do next year. So, to invest for a 1-year time period is folly. People should be investing for a much longer time horizon—at least a decade.”
2. Take risks, get rewards. “Risk and return go hand in hand,” Utley says. In other words, there’s really no such thing as a totally safe investment. And that’s a good thing, “because if you were not exposed to risk, you would not be exposed to the potential for return,” he says.

For instance, stocks tend to have higher returns over a longer period of time, but they also tend to be more volatile. Bonds tend to be more stable, but they also generally have lower rates of return. “So, if you're a person with a low tolerance for risk and a short time horizon to invest, you’d want to have more bonds in your portfolio. If you have a higher tolerance for risk and a longer time horizon, then you want to have more stocks,” Utley explains.

This story is contributed by John Murphy and is a part of our Global Content Initiative, where we feature selected stories from our Global network which we believe would be most useful and informative to our doctor members.