Understanding Managed Bond Funds

Considerations for the Physician-Investor

By Staff Reportersdhimc-book11

Proper diversification among types of bonds is an important investment objective. The maturity schedule and the number of issuers are often very important, along with the issuers’ creditworthiness.

Individual Constraints

The constraints on purchases of individual bond issues often put the physician-investor at a disadvantage. Minimum amounts of investments are imposed by the marketplace or the issuer. Many doctor-investors find it impractical to meet these requirements and also obtain proper diversification (the amount of portfolio funds committed to debt-based securities simply is not large enough to obtain diversification and at the same time meet the other limitations). Accordingly, many investors find mutual funds devoted to debt-based securities most effective in achieving diversification.

A Large Marketplace

The mutual fund marketplace has many types of bond funds, and diversification can be obtained quite easily. The investor with a relatively reduced amount to invest in debt-based securities should consider using mutual funds.

Assessment

For more terminology information, please refer to the Dictionary of Health Economics and Finance.

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Conclusion

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Exercising Healthcare Employee Options

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Vital Information for Medical Professionals and Heathcare Workers

[By Staff Reporters]dhimc-book9

To a large degree the decision to exercise a stock option will depend on whether the medical professional, hospital or other healthcare services employee is going to hold the stock following the exercise or is going to sell the stock immediately.

A Bifurcated Decision Point

1. If the employee intends to sell the stock, then he or she should try to time the exercise so that the stock is at its highest value.

2. If the employee is going to hold the acquired stock for future investment, then he or she should exercise the option as late as possible under the terms of the option agreement; the employee thus enjoys all upside potential without any investment and has nothing at risk.

Exceptions

There are two exceptions to the general rule:

1. First, if the rate of dividends is sufficient to cover the financing cost, or is at least equal to other investment returns, then exercise of the options makes sense.

2. Second, if the option is an Incentive Stock Option [ISO], the potential application of the alternative minimum tax (AMT) rules may force the employee to stagger the exercise.

Assessment

For more terminology information, please refer to the Dictionary of Health Economics and Finance.

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated?

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com 

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Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

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