It’s hard to believe, but surgeons still operate on the wrong limb, organ etc. Sometimes to devastating effect.
The extent of the problem is not precisely known, but why does this still happen? There certainly is some issue with not following procedures, but there is something else going on. Dr. David L. Petrow in the Washington Post writes:
“It has long recommended that doctors “mark the procedure site” before surgery, effectively labeling the correct location. This is a reasonable strategy. It is also the wrong one. Instead, doctors should label the wrong site whenever there is a risk of left/right confusion. Many surgeons and operating room staff will recall that patients and their families sometimes take it upon themselves to write “no” on the wrong site before a surgery. These people get it right.”
What, if anything, does this mean for investing? It has long been argued that investors should have a written investment policy statement. That fact is that most investors don’t have any such document. Maybe investors should take a page from surgery. Instead of affirmatively stating what you WILL invest in, write out what things you WON’T invest in.
This could include buying individual stocks, using leverage, trading options and/or futures, buying high-fee funds, etc. You get the idea. This list could be as detailed as you want. Rather than asking yourself does this investment fit my parameters? It’s better to say is this a ‘no-go’ type of investment?
We all make mistakes. It’s human nature. The challenge is trying to minimize those mistakes and learn from them. Writing out an investment policy statement can be intimidating. Instead write a list of things you won’t do…and stick to it.