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The Dow Jones Industrial Average (DJIA), often referred to simply as “the Dow,” is one of the oldest and most well-known stock market indices in the world. It was created in 1896 by Charles Dow, the co-founder of The Wall Street Journal, and is designed to represent the performance of the broader U.S. stock market, specifically focusing on 30 large, publicly traded companies. These companies are considered leaders in their respective industries and serve as a barometer for the overall health of the U.S. economy.
The Composition of the DJIA
The DJIA includes 30 companies, which are selected by the editors of The Wall Street Journal based on various factors such as market influence, reputation, and the stability of the company. These companies represent a wide array of sectors, including technology, finance, healthcare, consumer goods, and energy. Notably, the companies chosen for the DJIA are not necessarily the largest companies in the U.S. by market capitalization, but rather those that are most indicative of the broader economy. Some of the prominent companies listed in the DJIA include names like Apple, Microsoft, Coca-Cola, and Johnson & Johnson.
However, the list of 30 companies is not static. Over time, companies may be added or removed to reflect changes in the economic landscape. For example, if a company experiences significant decline or no longer represents a leading sector, it might be replaced with another company that better reflects modern economic trends. This periodic reshuffling ensures that the DJIA continues to be a relevant measure of economic activity.
How the DJIA is Calculated
The DJIA is a price-weighted index, which means that the value of the index is determined by the share price of the component companies, rather than their market capitalization. To calculate the DJIA, the sum of the stock prices of all 30 companies is divided by a special divisor. This divisor adjusts for stock splits, dividends, and other corporate actions to maintain the integrity of the index over time. The price-weighted method means that higher-priced stocks have a greater impact on the movement of the index, regardless of the overall size or economic weight of the company.
For instance, if a company with a higher stock price like Apple experiences a significant change in value, it will influence the DJIA more than a company with a lower stock price, even if the latter has a larger market capitalization. This makes the DJIA somewhat different from other indices, like the S&P 500, which is weighted by market cap and gives more weight to larger companies in terms of their economic impact.
Significance of the DJIA
The DJIA is widely regarded as a barometer of the U.S. stock market’s performance. Investors and analysts closely monitor the movements of the Dow to gauge the overall health of the economy. When the DJIA rises, it generally suggests that investors are optimistic about the economic outlook and that large companies are performing well. Conversely, when the DJIA falls, it often signals economic uncertainty or a downturn in market conditions.
Despite being a narrow index, with only 30 companies, the DJIA holds substantial sway in financial markets. It is widely covered in the media and is often cited in discussions about the state of the economy. In fact, the performance of the DJIA is considered a key indicator of investor sentiment and economic confidence.
However, the DJIA has its limitations. Since it only includes 30 companies, it does not necessarily represent the broader market or capture the performance of smaller companies. Other indices, like the S&P 500, which includes 500 companies, offer a more comprehensive view of the market’s performance.
Conclusion
The Dow Jones Industrial Average is a key metric for understanding the state of the U.S. economy and the stock market. Although it has evolved over the years, it continues to provide valuable insights into the performance of large, influential companies. While it is not a perfect reflection of the market as a whole, the DJIA remains one of the most important and widely recognized indices in global finance. Through its historical significance and its role in shaping market sentiment, the Dow has cemented its place as a cornerstone of financial analysis.
“THE INVESTOR’S CHIEF problem—even his worst enemy—is likely to be himself.” So wrote Benjamin Graham, the father of modern investment analysis.
With these words, written in 1949, Graham acknowledged the reality that investors are human. Though he had written an 800 page book on techniques to analyze stocks and bonds, Graham understood that investing is as much about human psychology as it is about numerical analysis.
In the decades since Graham’s passing, an entire field has emerged at the intersection of psychology and finance. Known as behavioral finance, its pioneers include Daniel Kahneman, Amos Tversky and Richard Thaler. Together, they and their peers have identified countless human foibles that interfere with our ability to make good financial decisions. These include hindsight bias, recency bias and overconfidence, among others. On my bookshelf, I have at least as many volumes on behavioral finance as I do on pure financial analysis, so I certainly put stock in these ideas.
At the same time, I think we’re being too hard on ourselves when we lay all of these biases at our feet. We shouldn’t conclude that we’re deficient because we’re so susceptible to biases. Rather, the problem is that finance isn’t a scientific field like math or physics. At best, it’s like chaos theory. Yes, there is some underlying logic, but it’s usually so hard to observe and understand that it might as well be random. The world of personal finance is bedeviled by paradoxes, so no individual—no matter how rational—can always make optimal decisions.
As we plan for our financial future, I think it’s helpful to be cognizant of these paradoxes. While there’s nothing we can do to control or change them, there is great value in being aware of them, so we can approach them with the right tools and the right mindset.
Here are just seven of the paradoxes that can bedevil financial decision-making:
There’s the paradox that all of the greatest fortunes—Carnegie, Rockefeller, Buffett, Gates—have been made by owning just one stock. And yet the best advice for individual investors is to do the opposite: to own broadly diversified index funds.
There’s the paradox that the stock market may appear overvalued and yet it could become even more overvalued before it eventually declines. And when it does decline, it may be to a level that is even higher than where it is today.
There’s the paradox that we make plans based on our understanding of the rules—and yet Congress can change the rules on us at any time, as it did just last year.
There’s the paradox that we base our plans on historical averages—average stock market returns, average interest rates, average inflation rates and so on—and yet we only lead one life, so none of us will experience the average.
There’s the paradox that we continue to be attracted to the prestige of high-cost colleges, even though a rational analysis that looks at return on investment tells us that lower-cost state schools are usually the better bet.
There’s the paradox that early retirement seems so appealing—and has even turned into a movement—and yet the reality of early retirement suggests that we might be better off staying at our desks.
There’s the paradox that retirees’ worst fear is outliving their money and yet few choose the financial product that is purpose-built to solve that problem: the single-premium immediate annuity.
How should you respond to these paradoxes? As you plan for your financial future, embrace the concept of “loosely held views.”
In other words, make financial plans, but continuously update your views, question your assumptions and rethink your priorities.
Artificial Intelligence and Investing: A Transformative Partnership
Artificial Intelligence (AI) is revolutionizing the world of investing, reshaping how decisions are made, risks are assessed, and portfolios are managed. As financial markets grow increasingly complex and data-driven, AI offers powerful tools to navigate this landscape with greater precision, speed, and insight.
At its core, AI refers to systems that can perform tasks typically requiring human intelligence—such as learning, reasoning, and problem-solving. In investing, this translates into algorithms that can analyze vast amounts of financial data, detect patterns, and make predictions with remarkable accuracy. Machine learning, a subset of AI, enables these systems to improve over time by learning from new data, making them especially valuable in dynamic markets.
One of the most significant applications of AI in investing is algorithmic trading. These systems can execute trades at lightning speed, responding to market fluctuations in milliseconds. By analyzing historical data and real-time market conditions, AI-driven trading platforms can identify optimal entry and exit points, often outperforming human traders. High-frequency trading firms have long relied on such technologies to gain competitive advantages.
AI also enhances portfolio management through robo-advisors—digital platforms that use algorithms to provide personalized investment advice. These tools assess an investor’s goals, risk tolerance, and time horizon, then construct and manage a diversified portfolio accordingly. Robo-advisors democratize access to financial planning, offering low-cost, automated solutions to individuals who might not afford traditional advisory services.
Risk assessment is another area where AI shines. By processing alternative data sources—such as social media sentiment, news articles, and satellite imagery—AI can uncover hidden risks and opportunities. For instance, a sudden spike in negative sentiment around a company on Twitter might signal reputational issues, prompting investors to reevaluate their positions. AI models can also forecast macroeconomic trends, helping investors anticipate shifts in interest rates, inflation, or geopolitical events.
Moreover, AI is transforming fundamental analysis. Natural language processing (NLP) allows machines to read and interpret earnings reports, SEC filings, and analyst commentary. This enables investors to extract insights from unstructured data that would be time-consuming to analyze manually. AI can even detect subtle linguistic cues that may indicate a company’s future performance or management’s confidence.
Despite its advantages, AI in investing is not without challenges. Models can be opaque, making it difficult to understand how decisions are made—a phenomenon known as the “black box” problem. There’s also the risk of overfitting, where algorithms perform well on historical data but fail in real-world scenarios. Ethical concerns, such as bias in data and the potential for market manipulation, must also be addressed.
In conclusion, AI is reshaping the investing landscape, offering tools that enhance efficiency, accuracy, and accessibility. While it’s not a panacea, its integration into financial markets marks a profound shift in how capital is allocated and wealth is managed. As technology continues to evolve, investors who embrace AI will be better positioned to thrive in an increasingly data-driven world.
A hedge fund is a limited partnership of private investors whose money is pooled and managed by professional fund managers. These managers use a wide range of strategies, including leverage (borrowed money) and the trading of nontraditional assets, to earn above-average investment returns. A hedge fund investment is often considered a risky, alternative investment choice and usually requires a high minimum investment or net worth. Hedge funds typically target wealthy investors.
The hedge fund manager I am considering also runs an offshore fund under a “master feeder” arrangement.
A PHYSICIAN’S QUESTION:What does this mean? In which fund should I invest?
The master feeder arrangement is a two-tiered investment structure whereby investors invest in the feeder fund. The feeder fund in turn invests in the master fund. The master fund is therefore the one that is actually investing in securities. There may be multiple feeder funds under one master fund. Feeder funds under the same master can differ drastically in terms of fees charged, minimums required, types of investors, and many other features – but the investment style will be the same because only the master actually invests in the market.
A master feeder structure is a very popular arrangement because it allows a portfolio manager to pool both onshore and offshore assets into one investment vehicle (the master fund) that allocates gains and losses in an asset-based, proportional manner back to the onshore and offshore investors. All investors, both offshore and onshore, get the same return. In this manner, the portfolio manager, despite offering more than one fund with different characteristics to different populations, is not faced with the dilemma of which fund to favor with the best investment ideas.
A manager may offer an offshore fund because there is demand for that manager’s skill either abroad, where investors may wish to preserve anonymity, or more commonly where investors simply do not wish to become entangled with the United States tax code. American citizens should generally avoid the offshore fund, since American citizens are taxed on their allocated share of offshore corporation profits whether or not a distribution occurs. Therefore, there is no benefit for most American taxpayers investing in an offshore fund.
Tax-exempt institutions, such as medical foundations, in the United States may have reason to consider an offshore hedge fund, however. Domestic tax-exempt organizations are generally not subject to unrelated business taxable income (UBTI) – the portion of hedge fund income that comes about as a result of the use of leverage – when investing with an offshore corporation. If the same tax-exempt organization were to invest in a domestic fund, and if UBTI was generated, then the organization would have to pay taxes on that UBTI. Most domestic hedge funds generate UBTI.
After a lifetime of hard work practicing medicine and saving, you’re at the retirement finish line. Instead of a paycheck, you’re relying on your nest egg and investment income to cover the bills. Picking the right investments is even more important, as you won’t have much chance to recover as a retired MD, DO, DPM or DDS.
“You made it to the top of the mountain through a systematic approach and are trying to make your way down safely,” says retirement planner John Gillet John Gillet in Hollywood, Fla. “Why throw all caution to the wind and try something different now?”
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Definitions
An annuity is an insurance contract designed to grow your money and then repay it as income. There are different versions. An immediate annuity turns your lump sum into future guaranteed income payments, like your own personal pension. They are simple to understand with no or small fees.
Fixed annuities pay a guaranteed interest rate over a set period to grow your money, like 5% a year for five years. These options could make sense as part of a retirement plan.
A variable annuity, on the other hand, invests your savings in mutual funds. While you can buy riders that guarantee a minimum income, you’ll be paying very much for it. “All in, the annual fees can be 3% or more of your balance,” says Jeff Bailey, an advisor from Nashville. “That’s a huge withdrawal rate from your portfolio versus investing on your own.”
The variable annuity will lock up your money for years. If you cancel early, you owe a surrender charge that could start at 7% or more of your annuity balance before gradually going down as time goes by. “Clients believe they can walk away with their contract value, but that’s often not true,” says Bailey.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Sometimes debt is a necessary tool in building wealth
Using debt to build wealth might seem counterintuitive. After all, when you calculate your wealth, you look at what you own (assets) and subtract what you owe (debts and liabilities) to determine what your net worth (wealth) is.
It’s easy to oversimplify that debt is bad and is harmful to your wealth. Because some debt is really harmful, like credit cards, automobile, debt gets lumped into the category of “bad.”
But some types of debt can be useful and sometimes necessary to create wealth; home, education, business, etc. For folks that don’t readily have access to large sums of cash or capital, debt may be the tool that allows them to expand.
In the case of financial investments, compounding interest relies on time to reveal its true magic.
Here’s how: a young investor can invest less money over a longer period of time than an older investor who invests more money over a shorter period and ends up with more in the end. Compounding returns grow exponentially, making time more than an ally – but a force of the universe driving growth.
Time is certainly our ally in investing, but according to ME-P Editor Dr. David Edward Marcinko MBA MEd, you’ll kick yourself wishing you had invested earlier when you witness compounding after a few years (or a decade).
Economy: Headline PCE rose from 2.6% on an annual basis in July to 2.7% in August, while core PCE stayed flat at 2.9%—all in line with analyst expectations.
Stocks: Solid inflation numbers helped equities arrest their recent selloff and offset the latest batch of tariffs. However, all three major indexes still ended the week lower than where they started.
Commodities: Oil climbed as Ukrainian drones continue to strike Russian energy infrastructure. Meanwhile, gold hit another all-time high, and rose above $3,800 for the first time ever at one point today.
According to Wayne Firebaugh CPA, CFP®, CMP™ alpha measures non-systematic return on investment [ROI], or the return that cannot be attributed to the market.
It shows the difference between a fund’s actual return and its expected performance given the level of systematic (or market) risk (as measured by beta).
Example
For example, a fund with a beta of 1.2 in a market that returns 10% would be expected to earn 12%. If, in fact, the fund earns a return of 14%, it then has an alpha of 2 which would suggest that the manager has added value. Conversely, a return below that expected given the fund’s beta would suggest that the manager diminished value.
In a truly efficient market, no manager should be able to consistently generate positive alpha. In such a market, the endowment manager would likely employ a passive strategy that seeks to replicate index returns. Although there is substantial evidence of efficient domestic markets, there is also evidence to suggest that certain managers do repeat their positive alpha performance.
In fact, a 2002 study by Roger Ibbotson and Amita Patel found that “the phenomenon of persistence does exist in domestic equity funds.” The same study suggested that 65% of mutual funds with the highest style-adjusted alpha repeated with positive alpha performances in the following year.
More Research
Additional research suggests that active management can add value and achieve positive alpha in concentrated portfolios.
A pre 2008 crash study of actively managed mutual funds found that “on average, higher industry concentration improves the performance of the funds. The most concentrated funds generate, after adjusting for risk … the highest performance. They yield an average abnormal return [alpha] of 2.56% per year before deducting expenses and 1.12% per year after deducting expenses.”
FutureMetrics
FutureMetrics, a pension plan consulting firm, calculated that in 2006 the median pension fund achieved record alpha of 3.7% compared to a 60/40 benchmark portfolio, the best since the firm began calculating return data in 1988. Over longer periods of time, an endowment manager’s ability to achieve positive alpha for their entire portfolio is more hotly debated. Dimensional Fund Advisors, a mutual fund firm specializing in a unique form of passive management, compiled FutureMetrics data on 192 pension funds for the period of 1988 through 2005.
Their research showed that over this period of time approximately 75% of the pension funds underperformed the 60/40 benchmark. The end result is that many endowments will use a combination of active and passive management approaches with respect to some portion of the domestic equity segment of their allocation.
Assessment
One approach is known as the “core and satellite” method in which a “core” investment into a passive index is used to capture the broader market’s performance while concentrated satellite positions are taken in an attempt to “capture” alpha. Since other asset classes such as private equity, foreign equity, and real assets are often viewed to be less efficient, the endowment manager will typically use active management to obtain positive alpha from these segments.
Notes:
Ibbotson, R.G. and Patel, A.K. Do Winners Repeat with Style? Summary of Findings – Ibbotson & Associates, Chicago (February 2002).
Kacperczyk, M.T., Sialm, C., and Lu Zheng. On Industry Concentration of Actively Managed Equity Mutual Funds. University of Michigan Business School. (November 2002).
2007 Annual US Corporate Pension Plan Best and Worst Investment Performance Report. FutureMetrics, April 20, 2007.
Conclusion
Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.
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@outlook.com
OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:
Posted on September 26, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I. and Staff Reporters
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Bonds: The 10-year Treasury yield popped on solid economic data yesterday, including weekly jobless claims falling to their lowest since mid-July and Q2 GDP rising unexpectedly.
Stocks: But good news for the labor market and economy is bad news for anyone hoping the Federal Reserve cuts interest rates next month, and the major indexes sank for a third day in a row yesterday. All eyes now turn to today’s key PCE reading.
Crypto: Digital assets continued to tumble yesterday with ether falling below $4,000 for the first time in months. There may be more pain ahead: $22 billion in crypto options expire today.
An app, which is short for “application,” is a type of software that can be installed and run on a computer, tablet, smartphone or other electronic devices. An app most frequently refers to a mobile application or a piece of software that is installed and used on a computer. Most apps have a specific and narrow function.
An easy and fairly cheap way for novices to get into investing is to use a robo-advisor. Basically, the funds you contribute will be invested by an algorithm based upon your goals, which are usually determined by taking a survey. This helps keep fees low; the algorithm doesn’t rely on a human expert to make trades, and you don’t have to spend significant amounts of time researching your investments. While this is a good way to start, it may not be the best option in the long run.
Online Brokerage or Investment Apps
More options are becoming available all the time, and they have opened trading to a much larger percentage of the population. That is a great thing, but it’s important to remember that “easier to invest” doesn’t necessarily mean it’s easy to invest well.
Be wary of apps that “gamify” trading and encourage risky choices. Keep in mind that trusted names offer more security, so do your research when you are selecting a platform.
A Financial Self Discovery Questionnairefor Medical Professionals
For understanding your relationship with money, it is important to be aware of yourself in the contexts of culture, family, value systems and experience. These questions will help you. This is a process of self-discovery. To fully benefit from this exploration, please address them in writing. You will simply not get the full value from it if you just breeze through and give mental answers. While it is recommended that you first answer these questions by yourself, many people relate that they have enjoyed the experience of sharing them with others who are important to them.
As you answer these questions, be conscious of your feelings, actually describing them in writing as part of your process.
Childhood
What is your first memory of money?
What is your happiest moment with Money? Your most unhappy?
Name the miscellaneous money messages you received as a child.
How were you confronted with the knowledge of differing economic circumstances among people, that there were people “richer” than you and people “poorer” than you?
Cultural heritage
What is your cultural heritage and how has it interfaced with money?
To the best of your knowledge, how has it been impacted by the money forces? Be specific.
To the best of your knowledge, does this circumstance have any motive related to Money?
Speculate about the manners in which your forebears’ money decisions continue to affect you today?
Family
How is/was the subject of money addressed by your church or the religious traditions of your forebears?
What happened to your parents or grandparents during the Depression?
How did your family communicate about money?
How? Be as specific as you can be, but remember that we are more concerned about impacts upon you than historical veracity.
When did your family migrate to America (or its current location)?
What else do you know about your family’s economic circumstances historically?
Your parents
How did your mother and father address money?
How did they differ in their money attitudes?
How did they address money in their relationship?
Did they argue or maintain strict silence?
How do you feel about that today?
Please do your best to answer the same questions regarding your life or business partner(s) and their parents.
Childhood: Revisited
How did you relate to money as a child? Did you feel “poor” or “rich”? Relatively? Or, absolutely? Why?
Were you anxious about money? Did you receive an allowance? If so, describe amounts and responsibilities.
Did you have household responsibilities?
Did you get paid regardless of performance?
Did you work for money?
If not, please describe your thoughts and feelings about that.
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Same questions, as a teenager, young adult, older adult.
Credit
When did you first acquire something on credit?
When did you first acquire a credit card?
What did it represent to you when you first held it in your hands?
Describe your feelings about credit.
Do you have trouble living within your means?
Do you have debt?
Adulthood
Have your attitudes shifted during your adult life? Describe.
Why did you choose your personal path? a) Would you do it again? b) Describe your feelings about credit.
Adult attitudes
Are you money motivated? If so, please explain why? If not, why not? How do you feel about your present financial situation? Are you financially fearful or resentful? How do you feel about that?
Will you inherit money? How does that make you feel?
If you are well off today, how do you feel about the money situations of others? If you feel poor, same question.
How do you feel about begging? Welfare? If you are well off today, why are you working?
Do you worry about your financial future?
Are you generous or stingy? Do you treat? Do you tip?
Do you give more than you receive or the reverse? Would others agree?
Could you ask a close relative for a business loan? For rent/grocery money?
Could you subsidize a non-related friend? How would you feel if that friend bought something you deemed frivolous?
Do you judge others by how you perceive they deal with their Money? Do you feel guilty about your prosperity? Are your siblings prosperous?
What part does money play in your spiritual life?
Do you “live” your Money values?
Conclusion
There may be other questions that would be useful to you. Others may occur to you as you progress in your life’s journey. The point is to know your personal money issues and their ramifications for your life, work, and personal mission.
This will be a “work-in-process” with answers both complex and incomplete. Don’t worry.
Just incorporate fine-tuning into your life’s process.
The study of behavioral economics has revealed much about how different biases can affect our finances—often for the worse.
Take loss aversion: Because we feel a financial setback more acutely than a commensurate gain, we often cling to failed investments to avoid realizing the loss. Another potential hazard is present bias, or the tendency to prefer instant gratification over long-term reward, even if the latter gain is greater.
When it comes to money, sometimes it’s difficult to make rational decisions. Here, are three behavioral financial biases that could be impeding financial goals.
ANCHORING BIAS
Anchoring Bias happens when we place too much emphasis on the first piece of information we receive regarding a given subject. Anchoring is the mental trick your brain plays when it latches onto the first piece of information it gets, no matter how irrelevant. You might know this as a ‘first impression’ when someone relies on their own first idea of a person or situation.
Example: When shopping for a wedding ring a salesman might tell us to spend three months’ salary. After hearing this, we may feel like we are doing something wrong if we stray from this financial advice, even though the guideline provided may cause us to spend more than we can afford.
Example: Imagine you’re buying a car, and the salesperson starts with a high price. That number sticks in your mind and influences all your subsequent negotiations. Anchoring can skew our decisions and perceptions, making us think the first offer is more important than it is. Or, subsequent offers lower than they really are.
Example: Imagine an investor named Jane who purchased 100 shares of XYZ Corporation at $100 per share several years ago. Over time, the stock price declined to $60 per share. Jane is anchored to her initial price of $100 and is reluctant to sell at a loss because she keeps hoping the stock will return to her original purchase price. She continues to hold onto the stock, even as it declines, due to her anchoring bias. Eventually, the stock price drops to $40 per share, resulting in significant losses for Jane.
In this example, Jane’s nchoring bias to the original purchase price of $100 prevents her from rationalizing to sell the stock and cut her losses, even though market conditions have changed. So, the next time you’re haggling for your self, a potential customer or client, or making another big financial decision, be aware of that initial anchor dragging you down.
HERD MENTALITY BIAS
Herd Mentality Bias makes it very hard for humans to not take action when everyone around us does.
Example: We may hear stories of people making significant monetary profits buying, fixing up, and flipping homes and have the desire to get in on the action, even though we have no experience in real estate.
Example: During the dotcom bubble of the late 1990’s many investors exhibited a herd mentality. As technology stocks soared to astronomical valuations, investors rushed to buy these stocks driven by the fear of missing out on the gains others were enjoying. Even though some of these stocks had questionable fundamentals, the herd mentality led investors to follow the crowd.
In this example, the herd mentality contributed to the overvaluation of technology stocks. Eventually, it led to the dot-com bubble’s burst, causing significant losses for those who had unthinkingly followed the crowd without conducting proper research or analysis.
OVERCONFIDENT INVESTING BIAS
Overconfident Investing Bias happens when we believe we can out-smart other investors via market timing or through quick, frequent trading. This causes the results of a study to be unreliable and hard to reproduce in other research settings.
Example: Data convincingly shows that people and financial planners/advisors and wealth managers who trade most often under-perform the market by a significant margin over time. Active traders lose money.
Example: Overconfidence Investing Bias moreover leads to: (1) excessive trading (which in turn results in lower returns due to costs incurred), (2) underestimation of risk (portfolios of decreasing risk were found for single men, married men, married women, and single women), (3) illusion of knowledge (you can get a lot more data nowadays on the internet) and (4) illusion of control (on-line trading).
ASSESSMENT
Finally, questions remain after consuming this cognitive bias review.
Question: Can behavioral cognitive biases be eliminated by financial advisors in prospecting and client sales endeavors?
A: Indeed they can significantly reduce their impact by appreciating and understanding the above and following a disciplined and rational decision-making sales process.
Question: What is the role of financial advisors in helping clients and prospects address behavioral biases?
A: Financial advisors can provide an objective perspective and help investors recognize and address their biases. They can assist in creating well-structured investment and financial plans, setting realistic goals, and offering guidance to ensure investment decisions align with long-term objectives.
Question:How important is self-discipline in overcoming behavioral biases?
A; Self-discipline is crucial in overcoming behavioral biases. It helps investors and advisors adhere to their investment plans, avoid impulsive decisions, and stay focused on long-term goals reducing the influence of emotional and cognitive biases.
CONCLUSION
Remember, it is far more useful to listen to client beliefs, fears and goals, and to suggest options and offer encouragement to help them discover their own path toward financial well-being. Then, incentivize them with knowledge of the above psychological biases to your mutual success!
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com
REFERENCES:
Marcinko, DE; Dictionary of Health Insurance and Managed Care. Springer Publishing Company, New York, 2007.
Marcinko, DE: Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™. Productivity Press, NY, 2016.
Marcinko, DE: Risk Management, Liability and Insurance Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™. Productivity Press, NY, 2017.
Nofsinger, JR: The Psychology of Investing. Rutledge Publishing, 2022
Winters, Scott: The 10X Financial Advisor: Your Blueprint for Massive and Sustainable Growth. Absolute Author Publishing House, 2020.
Investment bankers are not really bankers at all. The fact that the word banker appears in the name is partially responsible for the false impressions that exist in the medical community regarding the functions they perform.
For example, they are not permitted to accept deposit, provide checking accounts, or perform other activities normally construed to be commercial banking activities. An investment bank is simply a firm that specializes in helping other corporations obtain money they need under the most advantageous terms possible. When it comes to the actual process of having securities issued, the corporation approaches an investment banking firm, either directly, or through a competitive selection process and asks it to act as adviser and distributor.
Investment bankers, or under writers, as they are sometimes called, are middlemen in the capital markets for corporate securities. The corporation requiring the funds discusses the amount, type of security to be issued, price and other features of the security, as well as the cost to issuing the securities. All of these factors are negotiated in a process known as negotiated underwriting. If mutually acceptable terms are reached, the investment banking firm will be the middle man through which the securities are sold to the general public. Since such firms have many customers, they are able to sell new securities, without the costly search that individual corporations may require to sell its own security.
Thus, although the firm in need of additional capital must pay for the service, it is usually able to raise the additional capital at less expense through the use of an investment banker, than by selling the securities itself. The agreement between the investment banker and the corporation may be one of two types. The investment bank may agree to purchase, or underwrite, the entire issue of securities and to re-offer them to the general public. This is known as a firm commitment.
When an investment banker agrees to underwrite such a sale; it agrees to supply the corporation with a specified amount of money. The firm buys the securities with the intention to resell them. If it fails to sell the securities, the investment banker must still pay the agreed upon sum.
Thus, the risk of selling rests with the underwriter and not with the company issuing the securities.
The alternative agreement is a best efforts agreement in which the investment banker makes his best effort to sell the securities acting on behalf of the issuer, but does not guarantee a specified amount of money will be raised. When a corporation raises new capital through a public offering of stock, one might inquire where the stock comes from. The only source the corporation has is authorized, but previously un-issued stock. Anytime authorized, but previously un-issued stock (new stock) is issued to the public, it is known as a primary offering.
If it’s the very first time the corporation is making the offering, it’s also known as the Initial Public Offering (IPO). Anytime there is a primary offering of stock, the issuing corporation is raising additional equity capital.
A secondary offering, or distribution, on the other hand, is defined as an offering of a large block of outstanding stock. Most frequently, a secondary offering is the sale of a large block of stock owned by one or more stockholders. It is stock that has previously been issued and is now being re-sold by investors. Another case would be when a corporation re-sells its treasury stock.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Posted on September 13, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I. and Staff Reporters
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Stocks: The NASDAQ rose to its fifth record high of the week, while the S&P 500 and the Dow sank late in the day as investors turned their attention to the FOMC meeting next week.
Bonds: While equities climbed all week long, the bond market has been sending signals that weak economic data really isn’t great news.
Commodities: Oil rallied after President Trump expressed his growing frustration with Vladimir Putin and threatened further energy and financial sanctions. Meanwhile, the US may ask its G7 counterparts to apply 100% tariffs against China and India for purchasing Russian crude.
Posted on September 12, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I. and Staff Reporters
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BIAS
Bias is a prejudice in favor of or against one thing, person, or group compared with another, usually in a way considered to be unfair.
MYOPIA
Myopia (nearsightedness) is a common condition that’s usually diagnosed before age 20. It affects your distance vision — you can see objects that are near, but you have trouble viewing objects that are farther away like grocery store aisle markers or road signs. Myopia treatments include glasses, contact lenses or surgery.
MYOPIA BIAS
Myopia Bias makes it hard for us to imagine what our lives might be like in the future.
FinancialExample: When we are young, healthy and in our prime economic earning years it may be hard for us to picture what life will be like when our health depletes and we no longer have the earnings necessary to support our standard of living.
Irony: This short-sightedness makes it hard to save adequately when we are young … when saving does the most good.
Posted on September 7, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Health Capital Consultants, LLC
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A recent study of hospital physician acquisition and employment found that such acquisitions decrease competition and raise prices. A National Bureau of Economic Research (NBER) working paper, released in July 2025, “empirically analyze[d] the effects of mergers between complementary firms on competition and pricing,” and found hospital prices increased by an average of 3.3%, while physician prices increased by an average of 15.1%.
This Health Capital Topics article reviews the study’s findings and implications for the healthcare industry. (Read more…)
Posted on September 6, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters and A.I.
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Markets: Stocks started off Friday on a high note after a weak jobs report raised hopes that the Fed will cut interest rates this month. But the rally faded as the afternoon wore on, while 10-year bond yields tumbled to their lowest level since April.
Trade: President Trump said “fairly substantial” tariffs for semi-conductors are coming “very shortly,” but hinted that companies like Apple will be spared. He also clapped back at EU regulators for fines against Google.
Offbeat commodities: Raw sugar prices hit a two-month low as Brazilian producers churn out more of the sweet stuff, cocoa prices are expected to pop after Cargill paused production in Ivory Coast, and corn hit its highest price since July thanks to strong export demand.
Posted on September 5, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I. and Staff Reporters
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Stocks: Equities climbed slowly but steadily yesterday as investors braced themselves for today’s all-important jobs report.
Crypto: Bitcoin fell as a selloff in cryptocurrencies associated with the Trump family pulled the entire crypto market lower.
Commodities: Gold remains in the spotlight as traders bulk up on bullion to protect their portfolios in case the FOMC loses its independence. If that does happen,Goldman Sachs analysts think gold could climb to $5,000.
Posted on September 4, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I. and Staff Reporters
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Stocks: Markets slowed along yesterday with the S&P 500 and NASDAQ buoyed after a pivotal antitrust ruling for Alphabet pushed big tech stocks higher across the board.
Bonds: The 30-year Treasury pushed 5% yesterday as traders fret about the Fed’s independence and the odds of interest rate cuts.
Commodities: Oil sank on reports that OPEC+ is contemplating increasing its crude output next month, while gold reached yet another new record high as uncertainty swirling around the future of tariffs continued to rise. JPMorgan analysts now think the precious metal could climb as high as $4,250 by the end of next year.
Stocks: The stock markets rose today after Jerome Powell opened the door to interest rate cuts. The Dow soared to a new all-time high, while small-cap stocks in the Russell 2000 had a banner day.
Bonds: Yields fell while the chances of a rate cut after the Fed’s next meeting in September rose to 83%.
Commodities: Gold rose on rate cut hopes while oil fell as peace talks between Ukraine and Russia stalled. But the biggest winner is coffee: prices have risen for six straight days to cap off its biggest weekly gain since 2021.
A SPECIAL MEDICAL-EXECUTIVE-POST GUEST PRESENTATION
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What Is a Special Purpose Vehicle (SPV)?
A special purpose vehicle is a subsidiary created by a parent company to isolate financial risk. It’s also called a special purpose entity (SPE). Its legal status as a separate company makes its obligations secure even if the parent company goes bankrupt. A special purpose vehicle is sometimes referred to as a bankruptcy-remote entity for this reason.
These vehicles can become a financially devastating way to hide company debt if accounting loopholes are exploited, as seen in the 2001 Enron scandal.
Posted on August 19, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Dr. David Edward Marcinko MBA MEd
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In today’s dynamic economic landscape, the concept of a “side hustle” has evolved from a mere trend to an essential component of personal financial strategy for many individuals; even doctors.
A side hustle is a way to earn extra income outside of your primary job or main source of employment. It typically involves part-time work, freelancing, small businesses, or gig-based activities that can be pursued flexibly in your free time. Unlike traditional employment, side hustles often offer more autonomy, creative freedom, and the potential to monetize skills, hobbies, or passions.
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Doctor Gigs?
So, if you’re a doctor, dentist or podiatrist considering a side hustle, focus on something sustainable and long-term. Ask yourself: What am I already good at? What do people already ask me to help with? The best side hustles don’t require reinventing the wheel — just monetizing the one you’ve already been pushing uphill.
But, avoid gigs that require a huge upfront investment or promise overnight success. Instead, look for something that offers flexibility, ideally something that works with your schedule, not against your sanity.
Track your earnings and how much time you’re putting in. Side income should support your goals, whether that’s paying off debt, saving for a trip or just breathing easier when office rent comes due.
But, if it’s draining your energy from your medical practice with little to show for it, it might be time to rethink the hustle.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Doctors and dentists earn money by treating patients. CPAs and Attorneys have clients, and retail stores buy items low and sell them at higher prices. This is called a business model.
More formally, a business model identifies the products or services the business plans to sell, the target market, and any anticipated expenses, in order to outline how to generate a profit. Business models are important for both new and established businesses. They help companies attract investment, recruit talent, and motivate management and staff.
Businesses should regularly update their business model, or they’ll fail to anticipate trends and challenges ahead. Business models also help investors to evaluate companies that interest them and employees to understand the future of a company they may aspire to join.
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The Business Model of Pharmacy Benefits Managers
In the United States, health insurance providers often hire a third party to handle price negotiations, insurance claims, and distribution of prescription drugs. Providers that use such pharmacy benefit managers include commercial health plans, self-insured employer plans, Medicare Part D [drug] plans, the Federal Employees Health Benefits Program, and state government employee plans. PBMs are designed to aggregate the collective buying power of en-rollees through their client health plans, enabling plan sponsors and individuals to obtain lower prices for their prescription drugs. PBMs negotiate price discounts from retail pharmacies, rebates from pharmaceutical manufacturers, and mail-service pharmacies which home-deliver prescriptions without consulting face-to-face with a pharmacist.
Pharmacy benefit management companies can make revenue in several ways.
First, they collect administrative and service fees from the original insurance plan.
Then, they can also collect rebates from the manufacturer.
Traditional PBMs do not disclose the negotiated net price of the prescription drugs, allowing them to resell drugs at a public list price (also known as a sticker price), which is higher than the net price they negotiate with the manufacturer. This practice is known as “spread pricing”. The industry argues that savings are trade secrets. Pharmacies and insurance companies are often prohibited by PBMs from discussing costs and reimbursements. This leads to lack of transparency.
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Therefore, states are often unaware of how much money they lose due to spread pricing, and the extent to which drug rebates are passed on to en-rollees of Medicare plans. In response, states like Ohio, West Virginia, and Louisiana have taken action to regulate PBMs within their Medicaid programs.
For instance, they have created new contracts that require all discounts and rebates to be reported to the states. In return, Medicaid pays PBMs a flat administrative fee.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
THE ADDICTIVE INVESTING / TRADING PERSONALITY OF DOCTORS
Dr. Donald J. Mandell, a pediatrician, always needs to leave the office fifteen minutes ahead of schedule. The reason is because it takes that long to make the necessary number of trips to ensure the front door is truly locked.
Dr. Kamela A. Shaw, a general surgeon, is constantly rushing to the bath room so that she can wash her hands. As far as she is concerned, it is not possible to get one’s hands clean enough considering the COVID pandemic or recent influenza outbreak.
Although the behaviors displayed by these two doctors are different, they are consistent in that each, to some degree, display behavior that might be called an obsessive-compulsive disorder [OCD].
An obsession is a persistent, recurring preoccupation with an idea or thought. A compulsion is an impulse that is experienced as irresistible.
Obsessive-compulsive individuals feel compelled to think thoughts that they say they do not want to think or to carry out actions that they say are against their will. These individuals usually realize that their behavior is irrational, but it is beyond their control. In general, these individuals are preoccupied with orderliness, perfectionism, and mental and interpersonal control, at the expense of flexibility, openness, and efficiency. Specifically, behaviors such as the following may be seen:
Preoccupation with details.
Perfectionism that interferes with task completion.
Excessive devotion to work and office productivity.
Scrupulous and inflexible about morality (not accounted for by cultural or religious identification);
Inability to discard worn-out or worthless objects without sentimental value;
Reluctance to delegate tasks or to work with others.
Adopts a miserly spending style toward both self and others.
Demonstrates a rigid, inflexible and stubborn nature.
Most people resort to some minor obsessive-compulsive patterns under severe pressure or when trying to achieve goals that they consider critically important. In fact, many individuals refer to this as superstitious behavior. The study habits required for medical students entail a good deal of compulsive behavior.
As the above examples suggest, there are a variety of addictions possible. Recent news accounts have pointed out that even high-level governmental officials can experience sex addiction. The advent of social-media has led to what is referred to as Internet addiction where an individual is transfixed to a computer, tablet PC or smart-phone, “working” for hours on end without a specific project in mind. The simple act of “surfing”, “tweeting-X”, “texting” or merely posting opinions offers the person afflicted with the addiction some degree of satisfaction.
Still another form of addictive behavior is that of the individual with gambling disorder (GD).
GD is recognized as a mental disorder in the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders-V. This is the behavior of an individual who is unable to resist the impulse to gamble. Many reasons have been posited for this type of behavior including the death instinct; a need to lose; a history of trauma; a wish to repeat a big win; identification with adults the “gambler” knew as an adolescent; and a desire for action and excitement. There are other explanations offered for this form of compulsive behavior. The act of betting allows the individual to express an immature bravery, courage, manliness, and persistence against unfavorable odds. By actually using money and challenging reality, he puts himself into “action” and intense emotion. By means of gambling, the addicted individual is able to pretend that he is favored by “lady luck,” specially chosen, successful, able to beat the system and escape from feelings of discontent.
Greed can also have addictive qualities. In fact, a poll conducted by the Chicago Tribune revealed that folks who earned less than $30,000 a year, said that $50,000 would fulfill their dreams, whereas those with yearly incomes of over $100,000 said they would need $250,000 to be satisfied. More recent studies confirm that goals keep getting pushed upward as soon as a lower level is reached.
Edward Looney, executive director of the Trenton, New Jersey based Council on Compulsive Gambling (CCG) reports that the number of individuals calling with trading-associated problems is doubling annually. In the mid 1980s, when the council was formed, the number of people calling the council’s hotline (1 – 800 Gambler) with stock-market gambling problems was approximately 1.5 percent of all calls received. In 1998 that number grew to 3 percent, and rose to 8 percent by 2012. Today, that number is largely unknown because of its pervasiveness, but Dr. Robert Custer, an expert on compulsive gambling reported, that stock market gamblers represent over 20 percent of the gamblers that he has diagnosed. It is evident that on-line trading presents a tremendous risk to the speculator.
The CCG describes some of the consequences:
Dr. Fred B. is a 43-year-old Asian male physician with a salary above $150,000 and in debt for more than $150,000. He is married with two children. He was a day trader.
Michael Q. is a 28-year-old Hispanic male registered nurse. He is married and the father of one (7 month old) child. He earns $65,000 and lost $50,000 savings in day trading and is in debt for $30,000. He has suicidal ideation.
[B] A Question of Suitability
Since online traders are in it for many reasons, investment suitability rarely enters the picture, according to Stuart Kaswell, general counsel of the Securities Industry Association, in Washington, DC. The kind of question that has yet to be confronted, by day or online trading firms, is a statement, such as: “Equities look good this year. We favor technology stocks. We have a research report on our Web page that looks at the social media industry.” Those kinds of things are seldom considered because they do not involve a specific recommendation of a specific stock, like Apple, Google, Groupon, Facebook or Twitter.
However, if a firm makes a specific recommendation to an investor, whether over the cell-phone, iPad®, fax machine, face-to-face, instagram or over the Internet, or Twitter-X, suitability rules should apply. Opining similarly on the “know your customer” requirements is Steven Caruso, of Maddox, Koeller, Harget & Caruso of New York City. “The on-line firms obviously claim that they do not have a suitability responsibility because they do not want the liability for making a mistake as far as determining whether the investor was suitable or buying any security. I think that ultimately more firms are going to be required to make a suitability, [or eventually fiduciary] determination on every trade”.
[C] On-line Traders and Stock Market Gamblers
Some of the preferred areas of stock market gambling that attract the interest of compulsive gamblers include options, commodities, penny stocks and bit-coins, index investing, new stock offerings, certain types of CAT bonds, crowd-sourcing initiatives, and some contracts for government securities. These online traders and investment gamblers think of themselves as cautious long-term investors who prefer blue chip or dividend paying varieties. What they fail to take into consideration is that even seemingly blue chips can both rise and precipitously drop in value again, as seen in the summer of 2003, the “crash” of 2008, or the “flash crash” of May 6, 2010. On this day, the DJIA plunged 1000 points (about 9%) only to recover those losses within minutes. It was the second largest point swing 1,010.14 points, and the biggest one-day point decline, 998.5 points, on an intraday basis in Dow Jones Industrial Average history.
Regardless of investment choice, the compulsive investment gambler enjoys the anticipation of following the daily activity surrounding these investments. Newspaper, hourly radio and television reports, streaming computer, tablet and smart phone banners and hundreds of periodicals and magazines add excitement in seeking the investment edge. The name of the game is action. Investment goals are unclear, with many participating simply for the feeling it affords them as they experience the highs and lows and struggles surrounding the play. And, as documented by the North American Securities Administrators Association’s president, and Indiana Securities Commissioner, Bradley Skolnik, most day or online traders lose money. “On-line brokerage was new and cutting edge and we enjoyed the best stock market in generations, until the crashes. The message of most advertisements was “just do it”, and you’ll do well. The fact is that research and common sense suggest the more you trade, the less well you’ll do”.
Most day or online traders are young males, some who quit their day jobs before the just mentioned debacles; or more recently with the dismal economy. Many ceased these risky activities but there is some anecdotal evidence that is re-surging again with 2013-14 technology boom and market rise. Most of them start every day not owning any stock, then buy and sell all day long and end the trading day again without any stock – – just a lot of cash. Dr. Patricia Farrell, a licensed clinical psychologist states that day traders are especially susceptible to compulsive behaviors and addictive personalities. Mark Brando, registered principal for Milestone Financial, a day trading firm in Glendale, California states, “People that get addicted to trading employ the same destructive habits as a gambler. Often, it’s impossible to tell if a particular trade comes from a problem gambler or a legitimate trader.”
Arthur Levitt, former Chairman of the Securities and Exchange Commission (SEC) in discussing the risks and misconceptions of investing are only amplified by on-line trading. In a speech before the National Press Club a few years ago, he attempted to impress individuals as to the risks and difficulties involved with day trading. Levitt cited four common misconceptions that knowledgeable medical professionals, and all investors, should know:
Personal computers, tablets, mobile devices and smart-phones are not directly linked to the markets – Thanks to Level II computer software, day traders can have access to the same up-to-the-second information available to market makers on Wall Street. “Although the Internet makes it seem as if you have a direct connection to the securities market, you don’t. Lines may clog; systems may break; orders may back-up.”
The virtue of limit orders – “Price quotes are only for a limited number of shares; so only the first few investors will receive the currently quoted price. By the time you get to the front of the line, the price of the stock could be very different.”
Canceling an order – “Another misconception is that an order is canceled when you hit ‘cancel’ on your computer. But, the fact is it’s canceled only when the market gets the cancellation. You may receive an electronic confirmation, but that only mean your request to cancel was received – not that your order was actually canceled”.
Buying on margin – “if you plan to borrow money to buy a stock, you also need to know the terms of the loan your broker gave you. This is margin. In volatile markets, investors who put up an initial margin payment for a stock may find themselves required to provide additional cash if the price of the stock falls.
How then, can the medical professional or financial advisor tell if he or she is a compulsive gambler? A diagnostic may be obtained from Gamblers Anonymous. It is designed to screen for the identification of problem and compulsive gambling.
But, it is also necessary to provide a tool to be used by on-line traders. This questionnaire is as follows:
1. Are you trading in the stock market with money you may need during the next year?
2. Are you risking more money than you intended to?
3. Have you ever lied to someone regarding your on-line trading?
4. Are you risking retirement savings to try to get back your losses?
5. Has anyone ever told you that spend too much time on-line?
6. Is investing affecting other life areas (relationships, vocational pursuits, etc.)?
7. If you lost money trading in the market would it materially change your life?
8. Are you investing frequently for the excitement, and the way it makes you feel?
9. Have you become secretive about your on-line trading?
10. Do you feel sad or depressed when you are not trading in the market?
NOTE: If you answer to any of these questions you may be moving from investing to gambling.
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The cost of compulsive gambling and day trading is high for the individual medical or lay professional, the family and society at large. Compulsive gamblers, in the desperation phase of their gambling, exhibit high suicide ideation, as in the case of Mark O Barton’s the murderous day-trader in Atlanta who killed 12 people and injured 13 more in July 29th 1999. His idea actually became a final act of desperation.
Less dramatically, for doctors, is a marked increase in subtle illegal activity. These acts include fraud, embezzlement, CPT® up-coding, medical over utilization, excessive full risk HMO contracting, Stark Law aberrations and other “white collar crimes.” Higher healthcare and social costs in police, judiciary (civil and criminal) and corrections result because of compulsive gambling. The impact on family members is devastating. Compulsive gamblers cause havoc and pain to all family members. The spouses and other family members also go through progressive deterioration in their lives.
In this desperation phase, dysfunctional families are left with a legacy of anger, resentment, isolation, and in many instances, outright hate.
[D] Day Trading Assessment
Internet day trading, like the Internet and telecommunications sectors, become something of a investment bubble a few years ago, suggesting that something lighter than air can pop and disappear in an instant. History is filled with examples: from the tulip mania of 1630 Holland and the British South Sea Bubble of the 1700’s; to the Florida land boom of the roaring twenties and the Great Crash of 1929; to the collapse of Japans stock and real estate market in early 1990’s; and to an all-time high of $1,926 for an ounce of commodity gold a few years ago.
Today it is Ask: $3,388.30 USD Bid: $3,367.30 USD
CONCLUSION
To this list, one might again include smart-phone or mobile day trading.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Posted on July 31, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
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On July 14, 2025, the Centers for Medicare & Medicaid Services (CMS) released its proposed Medicare Physician Fee Schedule (MPFS) for calendar year (CY) 2026.
In addition to the agency’s suggested increase to physician payments, the proposed rule also announces a new payment model and more tele-health flexibilities.
According to CMS, the “proposed rule is one of several proposed rules that reflect a broader Administration-wide strategy to create a health care system that results in better quality, efficiency, empowerment, and innovation for all Medicare beneficiaries.” (Read more…)
Posted on July 29, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Stocks: Investors cheered the news of an EU & US trade deal over the weekend, pushing the S&P 500 above 6,400 for the first time ever. But the index gave up most of its gains late in the day as attention turned to a huge week of data ahead (more on that in a minute).
Trade: Today was the first day of discussions between US and Chinese negotiators in Stockholm to keep the trade war truce alive. Elsewhere, President Trump foresees a baseline 15% to 20% tariff rate for the rest of the world.
Commodities: Gold fell as trade deal hopes heightened investors’ risk appetite, while oil spiked higher after Trump gave Russia a 10- to 12-day deadline to sign a truce with Ukraine.
According to Bloomberg, 83% of the S&P 500 companies that have reported earnings have outpaced Wall Street’s estimates, putting the index on pace for its best season of beats since the second quarter of 2021.
Classic Definition: Research from Ernst-Young [Nikhil Lele and Yang Shim] uncovered a chasm between how consumer patients think they’re doing financially, and the actual state of their finances. Even more striking, their study suggested that improving consumers’ financial health will become one of the top imperatives in reframing consumer financial services.
Modern Circumstance: For example, the study asked consumers to rate their own financial health, and 83 percent rated themselves “good,” “very good” or “excellent.” Now, contrast this figure with what is known about their actual situation:
60 percent of Americans say they are financially stressed.
56 percent of Americans have less than $10,000 saved for retirement.
40 million American families have no retirement savings at all.
40 percent of Americans are not prepared to meet a $400 short-term emergency.
Paradox Example: Fortunately, even though the vast majority of consumers rate themselves as financially healthy, the study found that most still want to improve. Importantly for health economists, the attractive 25-34 and 35-49 year-old age groups were most likely to be extremely or very interested in improving their financial and economic health.
Paradox Example: Massively affluent consumer patients are even more interested in improving this paradox than their mass market counterparts.
Posted on July 25, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I.
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Stocks: President Trump said there’s a “50/50 chance” of a deal with the EU ahead of next week’s deadline. Investors decided they like those odds, and pushed the NASDAQ and S&P 500 to yet another new closing record high—in fact, the S&P 500 set a new record every day this week. Meanwhile, trade deal talks with Brazil have reportedly stalled.
Commodities: Oil fell to a three-week low today as Iran signaled a willingness to come to the negotiating table with European powers for nuclear talks.
Hopes of trade deals and less need for a safe haven investment pushed gold prices lower.
Stocks: The multi-day rally wavered this afternoon as investors turned their attention to big tech earnings tomorrow. The S&P 500 closed at a record high, while the NASDAQ finally broke its hot streak.
FOMC: Treasury Secretary Scott Bessent sees no reason for Jerome Powell to step down, while President Trump tempered his outrage against the Fed chair. Instead, well-known economist Mohamed El-Erian took up the gauntlet.
Trade: Bessent said China may get an extension to make a true trade deal, while promising a “rash of trade deals” in the coming days. Speaking of, Trump declared the US has made a deal with the Philippines capping import levies at 19%.
As we plan for our financial future, I think it’s helpful to be cognizant of these paradoxes. While there’s nothing we can do to control or change them, there is great value in being aware of them, so we can approach them with the right tools and the right mindset.
Here are just seven of the paradoxes that can bedevil financial planning and investment decision-making:
There’s the paradox that all of the greatest fortunes—Carnegie, Rockefeller, Buffett, Gates—have been made by owning just one stock. And yet the best advice for individual investors is to do the opposite: to own broadly diversified index funds.
There’s the paradox that the stock market may appear overvalued and yet it could become even more overvalued before it eventually declines. And when it does decline, it may be to a level that is even higher than where it is today.
There’s the paradox that we make plans based on our understanding of the rules—and yet Congress can change the rules on us at any time, as it did just a few weeks ago.
There’s the paradox that we base our plans on historical averages—average stock market returns, average interest rates, average inflation rates and so on—and yet we only lead one life, so none of us will experience the average.
There’s the paradox that we continue to be attracted to the prestige of high-cost colleges, even though a rational analysis that looks at return on investment tells us that lower-cost state schools are usually the better bet.
There’s the paradox that early retirement seems so appealing—and has even turned into a movement—and yet the reality of early retirement suggests that we might be better off staying at our desks.
There’s the paradox that retirees’ worst fear is outliving their money and yet few choose the financial product that is purpose-built to solve that problem: the single-premium immediate annuity.
Assessment
QUESTION: How should you respond to these paradoxes? As you plan for your financial future, embrace the concept of “loosely held views.” In other words, make financial plans, but continuously update your views, question your assumptions and rethink your priorities.
Posted on July 20, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I.
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The GENIUS Act is the law of the Land
President Trump signed the bill into law Friday, setting up a framework for regulating stablecoins—digital currency pegged to traditional assets—that are linked to the US dollar. It’s a big win for the crypto industry, and Trump said it was a “giant step to cement American dominance of global finance and crypto technology.”
The law could help push stablecoins into the mainstream, and major companies like Walmart and Amazon have been said to be considering launching their own, according to Morning Brew.
Markets: Stocks slid lower today even as a preliminary survey revealed that consumer sentiment hit its highest point since February, while inflation expectations fell to pre-tariff levels. The selloff deepened on reports that President Trump wants 15% to 20% tariffs against the EU, though the NASDAQ managed to eke out a win.
Crypto: Although bitcoin fell after the president signed the GENIUS Act into law, ether rose to its highest price in six months today, while enthusiasm for the new legislation pushed total crypto assets above $4 trillion.
Yes, you can contribute to both a Roth IRA and a 401(k), provided you don’t exceed annual contribution limits for each account.
Determining whether to contribute to a Roth IRA, 401(k), or both can be an important step in planning for your retirement. Here are the key differences, including tax advantages, employer contributions, and investment options.
Eligibility requirements are the first consideration when contributing to a Roth IRA and a 401(k). For Roth IRA contributions, your eligibility is determined by your income. Specifically, if your modified adjusted gross income (MAGI) exceeds certain thresholds, your ability to contribute to a Roth IRA may be reduced or eliminated. However, there are no income limits for contributing to a 401(k), making it accessible to anyone with earned income.
IRS rules do allow for contributions to both a Roth IRA and a 401(k), provided you adhere to the annual contribution limits for each account.
This means you can take advantage of the higher contribution limits of a 401(k) while also benefiting from the tax-free growth of a Roth IRA. This dual approach can be a strategy for maximizing your retirement savings. The advantages to contributing to both accounts present some key benefits, such as:
Tax diversification in retirement, allowing for better management of taxable income.
Potential reduction of overall tax burden.
Maximization of savings potential by taking full advantage of the benefits each account offers.3
Balancing contributions between a Roth IRA and a 401(k) requires careful planning. You might start by contributing enough to your 401(k) to receive the full employer match, which is essentially free money, if your employer offers this. Once you’ve secured the match, consider maxing out your Roth IRA contributions, if you’re eligible.
The Fed Drama: A White House official said President Trump will likely fire Jerome Powell soon. Stockssank at the thought of the Fed head being shown the door, offsetting the pleasant surprise of a flat wholesale inflation reading.
Markets: Stocks managed to recoup their losses after Trump said it’s “highly unlikely” that he will fire Powell, but bonds remained shaken.
Crypto: Bitcoin bounced higher after the crypto bills currently under consideration in the House of Representatives cleared a key hurdle.
Also called “qualified” or “statutory” stock options, ISOs are considered tax-advantaged stock options based on U.S. tax law. With ISOs, the spread (the difference between the award price and the fair market value) will count as income for the alternative minimum tax (AMT) in the year you exercise your options.
Example: If you exercise and hold the shares for more than one year past the exercise date and more than two years past the original grant date, the sale of the stock becomes a qualifying disposition, and any realized profit is typically taxed at the long-term capital gains rate. If you sell earlier, the spread will be taxed at your ordinary income tax rate.
ISOs vs. NSOs: What’s the difference?
There are two types of employee stock options: statutory and nonstatutory. They can also be referred to as qualified and nonqualified, respectively. ISOs are statutory (qualified) and differ from nonstatutory (nonqualified) stock options (NSOs) in a few key ways:
Eligibility. ISOs are issued only to employees, whereas NSOs can be granted to outside service providers like advisors, board directors or other consultants. Typically, mainly senior executives or key employees are given ISOs, as a company is not required to offer ISOs to all employees.
Tax perks. ISOs have more compelling tax treatment compared with NSOs.
Overconfident Investing Bias happens when we believe we can out-smart other investors via market timing or through quick, frequent trading. This causes the results of a study to be unreliable and hard to reproduce in other research settings.
Example: Data convincingly shows that people and financial planners/advisors and wealth managers who trade most often under-perform the market by a significant margin over time. Active traders lose money.
Example: Overconfidence Investing Bias moreover leads to: (1) excessive trading (which in turn results in lower returns due to costs incurred), (2) underestimation of risk (portfolios of decreasing risk were found for single men, married men, married women, and single women), (3) illusion of knowledge (you can get a lot more data nowadays on the internet) and (4) illusion of control (on-line trading).
Posted on July 13, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Health Capital Consultants LLC
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On June 25th, 2025, the Centers for Medicare & Medicaid Services (CMS) released its forecast on U.S. healthcare spending through 2033. The analysis, published in Health Affairs, estimated healthcare spending growth in 2024 and projected the growth into 2033. CMS found that overall healthcare spending growth has decreased slightly but is still elevated compared to pre-pandemic levels, and is expected to continue to moderately grow.
This Health Capital Topics article examines the factors underlying the forecasts. (Read more…)
Stocks: The major Wall Street stock indexes languished. The S&P pulled back from its record high to close the week just a bit lower, but the NASDAQ managed to post a gain across the week.
Crypto: Bitcoin hit a new high-water mark above $118,000. Next week, July 14th, Congress hosts “Crypto Week” to discuss regulating the industry in a growth-oriented manner.
Commodities: Silver rose to its highest level since 2011, and it’s been even hotter than gold. The metal is up ~27% this year. Oil, meanwhile, ticked higher on speculation that President Trump will place more sanctions on Russia early next week.
Bitcoin notched another all-time record yesterday, beating the previous record that was set two days ago.
Goldman Sachs plans to ask junior bankers to certify their loyalty every three months in order to prevent poaching by private equity firms, Bloomberg reported.
Stocks: Jobless claims came in lower than expected, the 30-year US bond auction met with strong demand, and Delta Airlines unofficially kicking off earnings season with a solid report. The S&P 500 and the NASDAQhit record highs.
Crypto: Bitcoin reached a record high for the second day in a row, hitting $113,863.31 today. The crypto’s price has stayed above $100k for 60 consecutive days.
Commodities: Coffee futures in New York climbed as much as 3.5% in response to President Trump’s threat to slap 50% tariffs on Brazil, which is the top producer of higher-end arabica coffee.
Stocks: The major indexes plowed higher with the minutes of the last FOMC meeting showing that officials were not at all united about when to begin cutting rates. Investors also treated more tariff letters sent by President Trump to seven more countries including Iraq and the Philippines as not vital.
Bonds: US Treasuries snapped a five-day losing streak after a $39 billion sale of 1-year notes was met with solid demand.
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