Over the past few weeks, celebrity doctor Mehmet Oz, better known simply as Dr. Oz, has been the subject of strong criticism for the alternative treatments he's known to promote on his show. One group of physicians went so far as to write a letter to Columbia University asking that the university fire Oz from its surgical staff.
Regardless of whether you side with Dr. Oz or his detractors, Oz's response to his critics highlights several big-picture philosophies that apply equally well to your long-term financial health as they do to your physical health.
Let's translate the doctor's health advice to improve our approach to managing our finances.
Lesson 1: Trust what works, but don't be afraid to test new theories
In an op-ed for TIME, Dr. Oz said:
The best and safest paths have generally been the traditions of conventional medicine. They are tried and true, well funded, and fast. But there are other routes to healing that offer wisdom as well, so I have been willing to explore alternative routes to healing
In your finances, this means to trust conventional wisdom when it comes to the basics. Eliminate non-productive debt such as credit cards and auto loans. Save as much as you can and take advantage of 401(k)s and/or IRAs. Minimize fees and taxes in your investments.
But it also means learning about new methods that could be effective. Every day, new tools make investing easier, faster, and cheaper. For example, online-only banks offer attractive interest rates on deposit accounts and make saving and investing much easier with new, smartphone-based features. Many brokerages now offer automated wealth-management products -- so called "robo advisors" that use artificial intelligence to select a diversified portfolio for you based on your goals and risk tolerances. New and exciting technologies like these and others seem to emerge every day.
The conventional wisdom is still valid, but new tools and approaches can be truly beneficial. It behooves you to consider these alternatives, even though they don't replace the wisdom found in Finance 101.
Lesson 2: Learn from your mistakes
Dr. Oz added in his editorial:
The reality of being a healer is that we won't ever know everything about our chosen field. ... So I have traveled off the beaten path in search of tools and tips that might help heal. These explorations are fraught with their own unique peril. ... I discovered problems in the promising research papers that supported some products; the products themselves were often poor quality; and scammers stole my image to promote fake pills. So I have no plans to return to [those products].
Finance, like medicine, tends to attract fraudsters, charlatans, and scammers. It's also a discipline that, even after years of study, can present situations you've never seen before. Mistakes will happen. Not all stocks will be winners.
For example, BlackBerry (NYSE:BB) was once the clear leader in smartphones, dominating the competition. Today, only a few short years later, BlackBerry has all be exited the mainstream smartphone market. To predict such a rapid and dramatic downfall would have been impossible. On an even bigger scale, virtually no one saw the financial crisis looming back in 2005 to 2007. That economic catastrophe blindsided the entire financial system. There are endless examples of good ideas gone bad and markets being caught off guard. It's just the reality of investing.
Given that investments will never be guaranteed to pan out, it follows that we should always be prepared to learn from our mistakes. Making a mistake isn't that big of a deal, but failing to learn from it is.
Lesson 3: Your financial plan should match your personal beliefs
In the final section of his letter, Dr. Oz passionately defends his stance on genetically modified foods. He says:
Other times the topics are controversial, but are still worthwhile. ... Whether you support genetically engineered crops or not, the freedom to make an informed choice should belong to consumers.
Dr. Oz thinks more testing on the long-term effects on humans should be done before we embrace GMO foods. His point of view is his own, and he chooses to put his energy and resources to work accordingly. In investing, you should take the same personalized approach.
Investing in a company is more than a simple financial transaction. It's also an implicit endorsement of the products that company produces and the ethics with which it conducts itself in the marketplace. Just because a company presents a great investing opportunity in a vacuum doesn't mean you have to click the "buy" button.
The point is that the choice is yours. If you strongly oppose cigarettes, you can choose to avoid investing in tobacco companies even if they present strong financial upside. It doesn't mean blindly investing solely based on your social or political views. It does mean being true to yourself and what you believe in.
Dr. Oz is a polarizing figure. Some call him a quack, and others treasure his advice. Whatever your personal opinion of him, I think it's a safe bet to apply his big-picture philosophies to your personal finance and investing.
Jay Jenkins has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.