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The Healing Wallet
A weekly blog focusing on financial guidance to help you manage wealth, advance your career, and integrate your faith.
Presented by Integritas Wealth Strategies
By Daniel Heidel
Issue No. 4
Diversification Wisdom: Not Putting All Your Eggs in One Basket (Ecclesiastes 11:2)
King Solomon knew about portfolio diversification 3,000 years before modern portfolio theory.
“Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.” When King Solomon penned these words in Ecclesiastes 11:2, he wasn’t just offering ancient wisdom—he was laying the foundation for what modern financial advisors call diversification. As a healthcare professional, you’ve dedicated your life to healing others, but have you applied this same timeless principle to healing your financial future?
Ancient Wisdom Meets Modern Markets
Solomon’s counsel to “divide your portion among seven, or even eight” wasn’t about literal agricultural investments. He understood a fundamental truth about uncertainty and risk that Wall Street would rediscover millennia later: spreading your investments across multiple areas protects you from catastrophic loss when one area fails.
Harry Markowitz won the Nobel Prize in 1990 for Modern Portfolio Theory, but he was essentially mathematically proving what Solomon observed through divine wisdom. The concept remains unchanged: diversification is the only free lunch in investing. By spreading your investments across different asset classes, geographic regions, and sectors, you can potentially reduce risk without sacrificing returns.
For healthcare professionals, this ancient wisdom carries special relevance. Your expertise in medicine provides tremendous value to society, but it also creates unique financial vulnerabilities that require careful diversification strategies to address.
The Healthcare Professional’s Diversification Dilemma
Dr. Fiction, an orthopedic surgeon, thought he was being smart by investing heavily in healthcare stocks. “I understand the industry,” he reasoned, “so I should invest where I have knowledge.” By retirement, 80% of his portfolio was in healthcare companies, pharmaceutical stocks, and medical device manufacturers. When healthcare sector performance lagged for three consecutive years, his retirement plans were derailed.
This mistake illustrates a common trap for healthcare professionals: over-concentration in familiar sectors. Your medical expertise doesn’t necessarily translate to investment expertise in healthcare companies. More importantly, your career already depends on the healthcare industry’s success—why double down by making your investments dependent on the same sector?
True diversification for healthcare professionals means looking beyond the comfort zone of medical-related investments. Your financial health requires the same systematic approach you use in patient care: comprehensive assessment, risk evaluation, and strategic treatment planning.
Geographic Diversification: A Global Perspective
Solomon’s wisdom about not knowing “what disaster may come upon the land” applies powerfully to geographic diversification. As a healthcare professional, your practice income is typically tied to your local community and the U.S. healthcare system. International diversification provides a hedge against domestic economic challenges, healthcare policy changes, and regional disasters.
Consider the impact of different healthcare systems worldwide. While you practice within the American healthcare framework, investing in international markets exposes you to economies with different healthcare structures, regulatory environments, and growth patterns. This geographic spread helps protect your portfolio from country-specific risks while capturing global growth opportunities.
International diversification also provides currency hedging benefits. When the dollar weakens, international investments can provide returns that help maintain your purchasing power—a crucial consideration for healthcare professionals planning for retirement in an uncertain economic environment.
Asset Class Diversification: Beyond Stocks and Bonds
Healthcare professionals often focus solely on traditional stock and bond investments, but true diversification extends across multiple asset classes. Real estate investment trusts (REITs) provide exposure to property markets without direct management responsibilities. Commodities can hedge against inflation—a particular concern for healthcare professionals whose income might not keep pace with rising costs.
Alternative investments like private equity or hedge funds may be accessible to high-earning healthcare professionals, but they require careful evaluation. These investments often have higher minimum requirements and less liquidity, but they can provide returns that don’t correlate with traditional markets.
Remember Solomon’s counsel about eight ventures—don’t limit yourself to just stocks and bonds. A well-diversified portfolio might include domestic stocks, international stocks, bonds, real estate, commodities, and alternative investments, each serving a specific purpose in your overall strategy.
Income Stream Diversification: Beyond Your Practice
Your medical practice provides substantial income, but it’s essentially a single source of revenue. What happens if you become unable to practice due to illness, injury, or disability? Building diversified income streams protects against this vulnerability.
Dividend-paying stocks provide regular income that doesn’t depend on your ability to see patients. Real estate investments can generate rental income. Business investments outside healthcare can provide income diversification while leveraging your leadership and analytical skills.
Some healthcare professionals develop multiple income streams within medicine—teaching, consulting, speaking, or writing. While these can supplement practice income, they still depend on your medical expertise and availability. True income diversification includes sources that can continue generating revenue even if you can’t work.
Faith-Based Investing Within Diversification
Christian healthcare professionals often wonder how faith-based investing fits within diversification strategies. The good news is that socially responsible investing (SRI) and Environmental, Social, and Governance (ESG) investing have evolved to offer diversified options that align with Christian values.
You can maintain diversification while avoiding investments that conflict with your faith. Faith-based mutual funds and ETFs provide exposure to various sectors and asset classes while screening out companies involved in activities that contradict Christian principles. This approach allows you to honor God with your investments while still following Solomon’s diversification wisdom.
Seeking God’s Wisdom in Investment Decisions
Solomon’s investment advice was part of broader wisdom about preparing for uncertainty while trusting God’s sovereignty. As healthcare professionals, we see daily how quickly circumstances can change. Diversification isn’t about lacking faith—it’s about being good stewards of the resources God has entrusted to us.
Prayer should be an integral part of your investment planning process. Seek God’s wisdom in making diversification decisions, ask for discernment in evaluating investment opportunities, and trust His guidance in balancing risk and return. Financial planning, like medical practice, benefits from both professional expertise and divine wisdom.
The Path Forward: Implementing Diversification Wisdom
Solomon’s ancient counsel remains remarkably relevant for today’s healthcare professionals. Diversification isn’t just about playing it safe—it’s about being strategically wise with your investments while acknowledging the uncertainties inherent in any economic system.
The goal isn’t to predict which investments will perform best, but to position your portfolio to weather various market conditions while capturing growth opportunities across different sectors, geographies, and asset classes. This approach honors both financial wisdom and biblical principles of prudent stewardship.
Ready to apply Solomon’s timeless wisdom to your investment strategy? Schedule time with me for a free investment consultation to review your current allocations.
Integritas Wealth Strategies, LLC
dheidel@iw-strategies.com
The information contained in this newsletter is purely for education purposes and should not be construed as financial advice. You should consult your tax advisor and attorney for any specific advice and recommendations relating to your situation.
