BOARD CERTIFICATION EXAM STUDY GUIDES Lower Extremity Trauma
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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 Series 6 exam — the Investment Company and Variable Contracts Products Representative Qualification Examination (IR) — assesses the competency of an entry-level representative to perform their job as an investment company and variable contracts products representative.
The exam measures the degree to which each candidate possesses the knowledge needed to perform the critical functions of an investment company and variable contract products representative, including sales of mutual funds and variable annuities.
Candidates must pass the Securities Industry Essentials (SIE) exam and the Series 6 exam to obtain the Investment Company and Variable Contracts Products registration.
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
The Series 7 exam — the General Securities Representative Qualification Examination (GS) — assesses the competency of an entry-level registered representative to perform their job as a general securities representative.
The exam measures the degree to which each candidate possesses the knowledge needed to perform the critical functions of a general securities representative, including sales of corporate securities, municipal securities, investment company securities, variable annuities, direct participation programs, options and government securities.
Stocks: The Russell 2000 went 967 days without hitting a new record high until Thursday. But, it looks like it will have to keep waiting for the next one—the small-cap-focused index fell, even as the DJIA, NASDAQ and S&P 500 rose to new closing highs on Friday.* Bonds: 2-year yields and 10-year yields both hit two-week intra-day highs even after the FOMC cut interest rates, indicating that traders still aren’t sure how the economy will perform in the months ahead. Commodities: Arabica futures fell on reports that lawmakers will introduce a bipartisan bill to exempt coffee from tariffs.
Posted on September 17, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
BREAKING NEWS!
By Staff Reporters
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Federal Reserve Chairman Jerome Powell just announced that the central bank [FOMC] would cut interest rates amid President Donald Trump’s attempts to reshape the Fed’s independence.
The chairman announced that the Federal Reserve would cut the interest rate by .25 points, the first time that it cut interest rates since December.
A paradox is a statement or situation that seems contradictory but actually makes sense when you think about it more deeply. It challenges logic and often reveals a hidden truth.
FLEXIBLY DOGMATIC PARADOX
The Flexibly Dogmatic Paradox suggests that no matter how sensible your financial planning, investing or wealth management process is there will be uncomfortably long periods when it looks broken. And process is the best way of ensuring you keep standing for something because if you don’t stand for something, you’ll fall for anything. This is why, when assessing an investment fund, focus 50% on the manager’s character and 50% on their process. Everything else is detail. There are few guarantees in investing, but the fact that markets will batter you emotionally is one of them.
Example: During volatile times, the temptation to abandon the process is strong. But that’s why it’s there. Process is what forces one fund manager to keep buying unbroken companies when everyone else thinks they’re bust, and another to keep faith with a top-quality company when the mob says it’s too expensive The best fund managers dogmatically stick to their process when it’s out of favor. Then, when it returns to favor, the elastic pings back: they recapture lost ground surprisingly fast. However, every rule has an exception. And spotting the exceptions to their process is something the true greats have a knack for buying and selling.
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Example: In 2007, US value manager Bill Miller had the makings of an investment legend, but the financial crisis wrecked all that. His process told him to double down into falling share prices, which had worked well for years. But it doesn’t work if the companies go bust, which many of his financial stocks did in 2008.
The fact is that no matter how good it is, a process operated without human judgment is just an algorithm. The best fund managers and financial prospectors and sales men/women know this.
They stick dogmatically to their process but somehow remain flexible enough to spot the occasions when it’s about to drive them into a brick wall.
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
Dr. Harry Markowitz is credited with developing the framework for constructing investment portfolios based on the risk-return tradeoff. William Sharpe, John Lintner, and Jan Mossin are credited with developing the Capital Asset Pricing Model (CAPM).
CAPM is an economic model based upon the idea that there is a single portfolio representing all investments (i.e., the market portfolio) at the point of the optimal portfolio on the Capital Market Line (CML) and a single source of systematic risk, beta, to that market portfolio. The resulting conclusion is that there should be a “fair” return investors should expect to receive given the level of risk (beta) they are willing to assume.
The excess return, or return above the risk-free rate, that may be expected from an asset is equal to the risk-free return plus the excess return of the market portfolio times the sensitivity of the asset’s excess return to the market portfolio excess return. Beta, then, is a measure of the sensitivity of an asset’s returns to the market as a whole. A particular security’s beta depends on the volatility of the individual security’s returns relative to the volatility of the market’s returns, as well as the correlation between the security’s returns and the markets returns.
While a stock may have significantly greater volatility than the market, if that stock’s returns are not highly correlated with the returns of the overall market (i.e., the stock’s returns are independent of the overall market’s returns), then the stock’s beta would be relatively low. A beta in excess of 1.0 implies that the security is more exposed to systematic risk than the overall market portfolio, and likewise, a beta of less 1.0 means that the security has less exposure to systematic risk than the overall market.
MPT has helped focus investors on two extremely critical elements of investing that are central to successful investment strategies.
First, MPT offers the first framework for investors to build a diversified portfolio. Furthermore, an important conclusion that can be drawn from MPT is that diversification does in fact help reduce portfolio risk.
Thus, MPT approaches are generally consistent with the first investment rule of thumb, “understand and diversify risk to the extent possible.”
Additionally, the risk/return tradeoff (i.e., higher returns are generally consistent with higher risk) central to MPT based strategies has helped investors recognize that if it looks too good to be true, it probably is.
Passive Investing
Passive investing is a monetary plan in which an investor invests in accordance with a pre-determined strategy that doesn’t necessitate any forecasting of the economy or an individual company’s prospects. The primary premise is to minimize investing fees and to avoid the unpleasant consequences of failing to correctly predict the future. The most accepted method to invest passively is to mimic the performance of a particular index. Investors typically do this today by purchasing one or more ‘index funds’. By tracking an index, an investor will achieve solid diversification with low expenses.
An ivestor could potentially earn a higher rate of return than an investor paying higher management fees. Passive management is most widespread in the stock markets. But with the explosion of exchange traded funds on the major exchanges, index investing has become more popular in other categories of investing. There are now literally hundreds of different index funds.
Passive management is based upon the Efficient Market Hypothesis theory. The Efficient Market Hypothesis (EMH) states that securities are fairly priced based on information regarding their underlying cash flows and that investors should not anticipate to consistently out-perform the market over the long-term.
The Efficient Market Hypothesis evolved in the 1960s from the Ph.D. dissertation of Eugene Fama. Fama persuasively made the case that in an active market that includes many well-informed and intelligent investors, securities will be appropriately priced and reflect all available information. If a market is efficient, no information or analysis can be expected to result in out-performance of an appropriate benchmark. There are three distinct forms of EMH that vary by the type of information that is reflected in a security’s price:
Weak Form
This form holds that investors will not be able to use historical data to earn superior returns on a consistent basis. In other words, the financial markets price securities in a manner that fully reflects all information contained in past prices.
Semi-Strong Form
This form asserts that security prices fully reflect all publicly available information. Therefore, investors cannot consistently earn above normal returns based solely on publicly available information, such as earnings, dividend, and sales data.
Strong Form
This form states that the financial markets price securities such that, all information (public and non-public) is fully reflected in the securities price; investors should not expect to earn superior returns on a consistent basis, no matter what insight or research they may bring to the table.
While a rich literature has been established regarding whether EMH actually applies in any of its three forms in real world markets, probably the most difficult evidence to overcome for backers of EMH is the existence of a vibrant money management and mutual fund industry charging value-added fees for their services.
The notion of passive management is counterintuitive to many investors. Passive investing proponents follow the strong market theory of EMH. These proponents argue several points including;
In the long term, the average investor will have a typical before-costs performance equal to the market average. Therefore the standard investor will gain more from reducing investment costs than from attempting to beat the market over time.
The efficient-market hypothesis argues that equilibrium market prices fully reflect all existing market information. Even in the case where some of the market information is not currently reflected in the price level, EMH indicates that an individual investor still cannot make use of that information. It is widely interpreted by many academics that to try and systematically “beat the market” through active management is a fools game.
Not everyone believes in the efficient market. Numerous researchers over the previous decades have found stock market anomalies that indicate a contradiction with the hypothesis. The search for anomalies is effectively the hunt for market patterns that can be utilized to outperform passive strategies. Such stock market anomalies that have been proven to go against the findings of the EMH theory include;
Low Price to Book Effect
January Effect
The Size Effect
Insider Transaction Effect
The Value Line Effect
All the above anomalies have been proven over time to outperform the market. For example, the first anomaly listed above is the Low Price to Book Effect. The first and most discussed study on the performance of low price to book value stocks was by Dr. Eugene Fama and Dr. Kenneth R. French. The study covered the time period from 1963-1990 and included nearly all the stocks on the NYSE, AMEX and NASDAQ. The stocks were divided into ten subgroups by book/market and were re-ranked annually. In the study, Fama and French found that the lowest book/market stocks outperformed the highest book/market stocks by a substantial margin (21.4 percent vs. 8 percent). Remarkably, as they examined each upward decile, performance for that decile was below that of the higher book value decile. Fama and French also ordered the deciles by beta (measure of systematic risk) and found that the stocks with the lowest book value also had the lowest risk.
Today, most researchers now deem that “value” represents a hazard feature that investors are compensated for over time. The theory being that value stocks trading at very low price book ratios are inherently risky, thus investors are simply compensated with higher returns in exchange for taking the risk of investing in these value stocks. The Fama and French research has been confirmed through several additional studies. In a Forbes Magazine 5/6/96 column titled “Ben Graham was right–again,” author David Dreman published his data from the largest 1500 stocks on Compustat for the 25 years ending 1994. He found that the lowest 20 percent of price/book stocks appreciably outperformed the market.
One item a medical professional should be aware of is the strong paradox of the efficient market theory. If each investor believes the stock market were efficient, then all investors would give up analyzing and forecasting. All investors would then accept passive management and invest in index funds. But if this were to happen, the market would no longer be efficient because no one would be scrutinizing the markets. In actuality, the efficient market hypothesis actually depends on active investors attempting to outperform the market through diligent research.
The case for passive investing and in favor of the EMH is that a preponderance of active managers do actually underperform the markets over time. The latest study by Standard and Poor’s (S&P) confirms this fact. S&P recently compared the performance of actively-managed mutual funds to passive market indexes twice per year. The 2012 S&P study indicated that indexes were once again outperforming actively-managed funds in nearly every asset class, style and fund category. The lone exception in the 2012 report was international equity, where active outperformed the index that S&P chose. The study examined one-year, three-year and five-year time periods. Within the U.S. equity space, active equity managers in all the categories failed to outperform the corresponding benchmarks in the past five year period. More than 65 percent of the large-cap active managers lagged behind the S&P 500 stock index. More than 81 percent of mid-cap mutual funds were outperformed by the S&P MidCap 400 index.
Lastly, 77 percent of the small-cap mutual funds were outperformed by the S&P SmallCap 600 index. U.S. bond active managers fared no better that equity managers over a five year period. More than 83 percent of general municipal mutual funds under-performed the S&P National AMT-Free Municipal Bond index, 93 percent of government long-term funds under-performed the Barclays Long Government index, nearly 95 percent of high yield corporate bond funds under-performed the Barclays High Yield index. Although the performance measurements for index investing are very strong, many analysts find three negative elements of passive investing;
Downside Protection: When the stock market collapses like in 2008, an index investor will assume the same loss as the market. In the case of 2008, the S&P 500 stock index fell by more than 50 percent, offering index investors no downside protection.
Portfolio Control: An index investor has no control over the holdings in the fund. In the event that a certain sector becomes over-owned (i.e. technology stocks in 2000), an index investor maintains the same weight as the index.
Average Returns: An index investor will never have the opportunity to outperform the market, but will always follow. Although the markets are very efficient, an investor can perhaps take advantage of market anomalies and invest with those managers who have maintained a long-term performance edge over the respective index.
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.
Here are some of the most common risks associated with fixed income securities.
Interest Rate Risk
The market value of the securities will be inversely affected by movements in interest rates. When rates rise, market prices of existing debt securities fall as these securities become less attractive to investors when compared to higher coupon new issues. As prices decline, bonds become cheaper so the overall return, when taking into account the discount, can compete with newly issued bonds at higher yields. When interest rates fall, market prices on existing fixed income securities tend to rise because these bonds become more attractive when compared to the newly issued bonds priced at lower rates.
Price Risk
Investors who need access to their principal prior to maturity have to rely on the secondary market to sell their securities. The price received may be more or less than the original purchase price and may depend, in general, on the level of interest rates, time to term, credit quality of the issuer and liquidity.
Among other reasons, prices may also be affected by current market conditions, or by the size of the trade (prices may be different for 10 bonds versus 1,000 bonds), etc. It is important to note that selling a security prior to maturity may affect actual yield received, which may be different than the yield at which the bond was originally purchased. This is because the initially quoted yield assumed holding the bond to term. As mentioned above, there is an inverse relationship between interest rates and bond prices. Therefore, when interest rates decline, bond prices increase, and when interest rates increase, bond prices decline.
Generally, longer maturity bonds will be more sensitive to interest rate changes. Dollar for dollar, a long-term bond should go up or down in value more than a short-term bond for the same change in yield. Price risk can be determined through a statistic called duration, which is featured at the end of the fixed income section.
Liquidity risk is the risk that an investor will be unable to sell securities due to a lack of demand from potential buyers, sell them at a substantial loss and/or incur substantial transaction costs in the sale process. Broker/dealers, although not obligated to do so, may provide secondary markets.
Reinvestment Risk
Downward trends in interest rates also create reinvestment risk, or the risk that the income and/or principal repayments will have to be invested at lower rates. Reinvestment risk is an important consideration for investors in callable securities. Some bonds may be issued with a call feature that allows the issuer to call, or repay, bonds prior to maturity. This generally happens if the market rates fall low enough for the issuer to save money by repaying existing higher coupon bonds and issuing new ones at lower rates. Investors will stop receiving the coupon payments if the bonds are called. Generally, callable fixed income securities will not appreciate in value as much as comparable non-callable securities.
Similar to call risk, prepayment risk is the risk that the issuer may repay bonds prior to maturity. This type of risk is generally associated with mortgage-backed securities. Homeowners tend to prepay their mortgages at times that are advantageous to their needs, which may be in conflict with the holders of the mortgage-backed securities. If the bonds are repaid early, investors face the risk of reinvesting at lower rates.
Purchasing Power Risk
Fixed income investors often focus on the real rate of return, or the actual return minus the rate of inflation. Rising inflation has a negative impact on real rates of return because inflation reduces the purchasing power of the investment income and principal.
When owners of a security spread false information to pump up the price of the security and subsequently sell off their shares, making a profit—the “dump.”
Refer to attempts by investors to move the price of a stock opportunistically by selling large numbers of shares short. The investors pocket the difference between the initial price and the new, lower price after this maneuver. This technique is illegal under SEC rules, which stipulate that every short sale must be on an uptick. For more information on this complex tactic, read on in this piece from the Wharton School of Business.
Wash Trading
Involves the simultaneous or near-simultaneous sale and repurchase of the same security for the purpose of generating activity and increasing the price.
When fraudsters manipulate the market through matched orders, they enter trades to buy or sell securities with the knowledge that a matching order on the opposite side has been or will be entered. During his tenure at the Commission, our partner Jordan Thomas was involved in a case where the SEC won summary judgement and obtained settlements with an astonishing 16 defendants who engaged in matched trades, among other illicit tactics.
Painting the Tape
Painting the tape refers to placing successive orders in small amounts at increasing or decreasing prices.
Spoofing & Layering
High frequency traders are known to use the tactics of Spoofing & Layering to manipulate share prices. Spoofing is the placing of a bid or offer with the intent to cancel before execution. Layering is a form of spoofing in which the trader places multiple orders on one side of the book, in order to create a false impression of heavy buying or selling.
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
Although 97% of people aren’t yet millionaires, many could eventually meet that target if they start investing sooner rather than later; especially doctors [MD, DO, DPM, DDS or DMD].
A 20-year-old, for instance, needs to invest just $330 a month into an asset class that delivers a 7% to 8% annual return to reach $1.26 million by the time s/he turns 65 years old. The luxury of time significantly boosts your chances of becoming a millionaire.
This doesn’t mean it’s too late for middle-aged savers to reach that millionaire milestone, but it will take a significantly greater investment. If a 50-year-old doctor hasn’t started saving for retirement, s/he would need to invest $3,958 a month at a steady 7% return to reach $1.26 million by retirement.
However, according to one Goldman Sachs report, investors could expect the S&P 500 to deliver just 3% annualized nominal returns over the next 10 years.
After an average 13% yearly return for the past decade, a new strategy outside of the stock market may be needed for that level of outsized gain, especially if you’re late to investing.
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 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.
Ikea Effect Bias describes the tendency of people to place a higher value on products they have partially created or assembled themselves. This phenomenon is named after the Swedish furniture retailer Ikea, known for selling furniture in flat-pack kits that customers must assemble at home.
he IKEA effect was identified and named by Michael Norton of Harvard Business School, Daniel Mochon of Yale University and colleague Dan Ariely PhD of Duke University, who published the results of three studies in 2011. They described the IKEA effect as “labor alone can be sufficient to induce greater liking for the fruits of one’s labor: even constructing a standardized bureau, an arduous, solitary task, can lead people to overvalue their (often poorly constructed) creations.”
Example: A prospect is more likely to pursue his/her own financial plan than that one from an informed financial planner, CPA or professional advisor.
2011 study found that subjects were willing to pay 63% more for furniture they had assembled themselves than for equivalent pre-assembled items.
IN FINANCE AND INVESTING
The IKEA effect can contribute to reducing panic selling. Investors typically reduce their stock market exposure after a financial crash which often results in “buy high, sell low” strategy that is detrimental to long-run wealth accumulation.
Ashtiani et al.’s study proposes a nudge utilizing the IKEA effect to counteract this phenomenon: “actively involving investors in the selection process of the risky investments, while restricting their selections in a way that preserves a large degree of diversification.”
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 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™
A.I. by Artificial Intelligence
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Artificial intelligence (AI) refers to computer systems capable of performing complex tasks that historically only humans could do, such as reasoning, making decisions, or solving problems. Today, the term “AI” describes a wide range of technologies that power many of the services and goods we use every day – from apps that recommend TV shows to chatbots that provide customer support in real time. And yet, there is a hierarchy among related concepts such as machine learning and deep learning.
So, to summarize the hierarchy:
AI is the goal: machines that can think and act intelligently.
Machine learning is a method within AI that lets machines learn from data.
Deep learning is a specialized form of machine learning that uses multi-layered neural networks to analyze data in a way that mimics the human brain.
It’s a feature, not a bug
And, there’s no shortage of companies leveraging AI today to remain profitable, to the delight of Salesforce investors: among others:
Wells Fargo’s CEO has touted trimming its workforce for 20 straight quarters. Its stock is up 228% over the past five years.
Bank of America CEO Brian Moynihan wasn’t hiding it during a recent earnings call when he said the company has let go of 88,000 employees over the past 15 years. BofA stock is up 95% since 2020.
Amazon, with its share value up 28% over the past year, recently told staff that AI implementation would lead to layoffs.
Microsoft has cut 15,000 jobs in the past two months as the company pivots to AI—and its stock is also up since the beginning of July.
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.
Posted on September 3, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I.
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Bonds: Treasury yields rose yesterday as investors dug into a Federal appeals court ruling last Friday stating that most of President Trump’s tariffs are illegal. The 30-year yield closed in on the key 5% level. Stocks: Equities tumbled across the board as technology stocks sold off and pulled the rest of the market down with them. Commodities: Gold hit a new record high as traders hedged against tariff uncertainty and braced themselves for an extremely important US jobs report on Friday that could make or break the case for the Fed to start cutting rates.
Posted on September 2, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I.
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Markets: After a day off for Labor Day, Wall Street is entering September with little confidence as stocks shrugle with tariffs and AI-slowdown jitters to rise for four straight months. September has historically been the weakest month for US stocks, plus a hugely consequential Federal Reserve meeting looms on September17th.
Stock spotlight: An already booming Celsius hit a 52-week high last week after Pepsi said it would up its stake in the energy drink maker.
Posted on August 31, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Rick Kahler; MSFP CFP™
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This month, the U.S. government demanded a direct cut of a company’s foreign sales as the price for letting those sales happen.
Tech companies Nvidia and AMD had been stuck in regulatory limbo over selling their newest AI chips to China. According to an August 12, 2025, Reuters article by Karen Freifeld, Nvidia CEO Jensen Huang had even received a public “green light” for the company’s H20 chip, but the Commerce Department would not issue the export licenses.
The stalemate ended only after Huang met with President Trump and agreed to a deal: the licenses would be granted, but the U.S. Treasury would get 15% of all H20 revenue from China. AMD agreed to identical terms for its MI308 chip. Two days later, both companies had their licenses.
The numbers are staggering. Bernstein Research estimates Nvidia could sell $15 billion worth of H20 chips in China this year, and AMD about $800 million of MI308s. That is more than $2 billion flowing straight to Washington, not as taxes but as a contractual price for market access. The legality of this arrangement is questionable, and the deal also raises security concerns.
It is worth noting the administration first asked for 20% before “settling” on 15%. This was not a polite request but a “take it or leave it” demand. From a behavioral economics standpoint, the decision was predictable. The pain of losing an entire market is far greater than the pain of losing a fraction of it.
How is this any different from a tariff? A tariff is a standardized, legally defined tax that applies broadly to certain goods and is collected under public trade policy. This 15% cut is a one-off, privately negotiated condition aimed at just two companies, tied to export license approval. It is taken from gross revenue, not profit, meaning the government gets paid on every dollar of sales before the companies cover a single expense.
“Tax farmming” is an old practice where the state sold the right to collect taxes for a fixed sum, allowing the collectors to keep the rest. Its use in France made some people enormously rich, made everyone else furious, and eventually helped spark the French Revolution. Similar systems appeared in Ottoman Egypt, Qing China, and the early Dutch Republic until abuses finally brought them down.
The Nvidia/AMD deal is not exactly tax farming, but it is a similar dynamic. The government’s role is no longer just regulating. It is stepping in as a business partner, taking a direct share of private sales. Supporters might call it a smart use of national leverage. Critics will see a step away from free-market capitalism toward something more political and transactional.
Nor is this deal a one-off. In June, the administration approved foreign investment in U.S. Steel only after securing a “golden share” that gives it veto power over strategic corporate decisions. History teaches us that once a government finds a way to take a cut, it rarely stops with one sector. Today it is steel and AI chips to China. Tomorrow it could be pharmaceuticals, energy, or consumer goods.
What is the likely impact for average Americans? Money flowing to the U.S. Treasury from a source other than taxpayers may seem like a benefit. Yet any company required to give away 15% of its gross revenue, which could equal its entire profit, has to compensate in some way. The most likely result is higher prices. Hiking prices on computer chips sold to China may not seem to be a big deal—until you consider that many of the products that use those chips are sold to U.S. consumers.
Posted on August 30, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
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Stocks: The final trading day of the summer was bad as a selloff in technology stocks took indexes down from recent all-time highs.
Fed drama: A judge did not issue a ruling on Fed Governor Lisa Cook’s bid for a temporary restraining order against President Trump, delaying it a few more days and leaving Cook in limbo.
Commodities: Gold hit a new all-time high as traders worried about the possibility of the Federal Reserve losing its independence.
Posted on August 27, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I.
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Bonds: Long-term Treasury yields rose and short-term yields fell after President Trump fired Fed Governor Lisa Cook opening the gap between 5-year and 30-year yields to its widest point in three years.
Stocks: Equities barely budged on the latest FOMC drama with investors’ attention fully focused on Nvidia earnings tomorrow afternoon.
Trade Craft: President Trump vowed retaliation against countries that apply a digital services tax against US tech companies. He may also slap a 200% tariff on China if that country restricts trade on rare earth magnets.
Posted on August 26, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Dr. David Edward Marcinko MBA MEd
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Types of investments
Once a physician [MD, DO, DPM or DDS] has a brokerage account, the young doctior will need to decide what to invest in. There are lots of options, and each comes with different benefits and drawbacks. Here are some of the most common options for new physician investors.
Stocks are the first thing most people think about when they are considering investing, but they are not the only option. The prices of stocks change daily, sometimes by large amounts, as the market adjusts to news and various cycles. For that reason, it’s important to do your research. If you’re just beginning with a retirement account, you could also consider the longer-term products listed below.
Index funds and mutual funds.
Index funds attempt to replicate the performance of an un-managed market index. The performance of mutual funds [open and closed] varies. You can often get involved for a lower initial investment, and they can provide good diversification,which makes your portfolio better equipped to handle market fluctuations [active and passive].
For that reason, many financial experts say they should form the core of your retirement portfolio. While they have many similar characteristics, there are important differences. Read more about some of the differences in index funds and mutual funds.
These technically aren’t investment products; they are a contract between you and an insurance company. However, they work to accomplish a similar goal. There are immediate annuities that convert some of your existing savings into lifetime payments, but if we’re talking about saving for retirement, a deferred income annuity is the closest comparison. You make premium payments into the deferred annuity on a regular or irregular basis depending on the contract terms, and when you reach retirement age, you annuitize those savings and receive payments for the rest of your life. They can make a valuable addition to a retirement savings strategy.
Other investments.
There are many other types of investments and financial vehicles: bonds [local, state or US], money market funds, certificates of deposit through a brokerage account or investment apps. Even the cash value of life insurance can play a part. They are all designed to address different needs and have benefits and drawbacks and may be important to your overall strategy.
Crypto.com is a cryptocurrency company based in Singapore that offers various financial services, including an app, exchange, and noncustodial DeFi wallet, NFT marketplace, and direct payment service in cryptocurrency. As of 2024, the company reportedly had more than 100 million customers and more than 4,000 employees.
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
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 21, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I. and Staff Reporters
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Technology: Fears of an A.I. bubble continue to climb after MIT published a report that 95% of companies using generative A.I. programs have nothing to show for it, despite pouring billions of dollars into this space.
Stocks: Another day of technology stocks selling off pulled the S&P 500 and NASDAQ lower yesterday, with investors rotating out of some of the hottest names and sectors in the market.
FOMC Drama: President Trump demanded the resignation of Fed Governor Lisa Cook for allegations of mortgage fraud. Meanwhile, the minutes from the July FOMC meeting revealed a growing divide between central bankers.
US government mulls 10% stake in Intel as Softbank invests $2b.
According to Morning Brew, Bloomberg and the Wall Street Journal reported recently that the government is considering becoming one of the beleaguered chipmaker’s biggest shareholders by converting grants the company was given under the Biden-era Chips Act into an equity stake.
At Intel’s current valuation, a 10% stake would be worth ~$10.5 billion—though the exact size of the stake and whether the government will move forward with the plan remains to be determined.
Meanwhile, over in the private sector, Softbank agreed to buy $2 billion worth of Intel stock, giving it a ~2% stake. Intel has been trying to turn itself around after losing ground to other semiconductor companies
UnitedHealth Group soared almost 12%, its biggest one-day gain in nearly five years, after getting the “Buffett Bounce.” Buffett’s Berkshire Hathaway revealed it bought ~5 million shares worth nearly $1.6 billion, giving a much-needed vote of confidence to the struggling health giant.
The White House is considering buying part of Intel, Bloomberg reported this week, which would be the latest big business deal the president pursues on behalf of the government. The Trump administration might acquire a stake in the struggling computer chip-maker using CHIPS Act funding—nearly $11 billion of which was already earmarked for Intel.
Saudi Arabia’s Public Investment Fund took an $8 billion write-down on five mega-projects it’s building, due to lower oil prices and higher costs.
Pimco, the asset management giant, warned that President Trump’s plan to IPO Fannie Mae and Freddie Mac could push mortgage rates higher.
Posted on August 16, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I.
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Stocks: The Dow climbed thanks to UnitedHealth and Warren Buffett while the rest of the market sank as the stock rally slowed. But, despite Friday’s decline, both the S&P 500 and NASDAQ wrapped up winning weeks.
Bonds: Both 10-year and 2-year Treasury yields continued to climb after Thursday’s PPI reading and Friday’s consumer confidence and retail sales data.
Commodities: All eyes were on Anchorage, Alaska as President Trump concluded talks with President Putin—discussions that will be crucial for crude’s future.
Posted on August 12, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I.
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Stocks: Markets struggled to pick a direction as investors took a wait-and-see approach ahead of today’s CPI reading—even as Wall Street worries about the data’s reliability.
Trade: President Trump asked China, the world’s largest soybean buyer, to quadruple its soybean purchases from the US. He also extended the trade war truce with China by 90 days
Commodities: Gold had its worst day in three months as traders waited for the White House to clarify its new tariffs on the key commodity—only for Trump to announce that it won’t be tariffed at all. Meanwhile, Chinese battery giant CATL halted operations at a mine that produces 4% of the world’s lithium, sending prices of the precious metal soaring.
Posted on August 9, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I.and Staff Reporters
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President Trump is set to sign an executive order allowing alternative assets such as cryptocurrency, private equity investments, and real estate in 401(k) accounts. Those accounts are a veritable gold mine—Americans have stashed approximately $12.5 trillion away for retirement, and alternative asset managers have been chomping at the bit to get a piece of that pie.
According to Brew Markets, the changes have been a long time coming. All the way back in his first term, Trump ordered the Labor Department to review how to incorporate private equity investments into retirement accounts, an effort that was later reversed under President Biden. This latest move expands beyond private equity, coinciding with Trump’s push to bring crypto mainstream.
Proponents argue that alternative assets in 401(k) accounts will enhance investment diversification and could provide retirees with greater profits. Detractors note that these assets are less liquid, less transparent, and generally more risky than investing retirement funds into publicly traded stocks and bonds.
In the early 1980s, Daniel Kahneman and Amos Tverskey proved in numerous experiments that the reality of decision making differed greatly from the assumptions held by economists. They published their findings in Prospect Theory: An analysis of decision making under risk, which quickly became one of the most cited papers in all of economics.
To understand the importance of their breakthrough, we first need to take a step back and explain a few things. Up until that point, economists were working under a normative model of decision making. A normative model is a prescriptive approach that concerns itself with how people should make optimal decisions. Basically, if everyone was rational, this is how they should act.
Amanda, an RN client, was just informed by her financial advisor that she needed to re-launch her 403-b retirement plan. Since she was leery about investing, she quietly wondered why she couldn’t DIY. Little does her Financial Advisor know that she doesn’t intend to follow his advice, anyway! So, what went wrong?
The answer may be that her advisor didn’t deploy a behavioral economics framework to support her decision-making. One such framework is the “prospect theory” model that boils client decision-making into a “three step heuristic.”
According to colleague Eugene Schmuckler PhD MBA MEd CTS, Prospect theory makes the unspoken biases that we all have more explicit. By identifying all the background assumptions and preferences that clients [patients] bring to the office, decision-making can be crafted so that everyone [family, doctor and patient] or [FA, client and spouse] is on the same page.
1. Simplify choices by focusing on the key differences between investment [treatment] options such as stock, bonds, cash, and index funds.
2. Understanding that clients [patients] prefer greater certainty when it comes to pursuing financial [health] gains and are willing to accept uncertainty when trying to avoid a loss [illness].
3. Cognitive processes lead clients and patients to overestimate the value of their choices thanks to survivor bias, cognitive dissonance, appeals to authority and hindsight biases.
CITE: Jaan E. Sidorov MD [Harrisburg, PA]
Assessment
Much like in healthcare today, the current mass-customized approaches to the financial services industry fall short of recognizing more personalized advisory approaches like prospect theory and assisted client-centered investment decision-making.
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
One of the major concepts that most investors should be aware of is the relationship between the risk and the return of a financial asset. It is common knowledge that there is a positive relationship between the risk and the expected return of a financial asset. In other words, when the risk of an asset increases, so does its expected return. What this means is that if an investor is taking on more risk, he/she is expected to be compensated for doing so with a higher return. Similarly, if the investor wants to boost the expected return of the investment, he/she needs to be prepared to take on more risk.
Harry Max Markowitz (August 24, 1927 – June 22, 2023) was an American economist who was a professor of finance at the Rady School of Management at UCSD. He is best known for his pioneering work in modern portfolio theory, studying the effects of asset risk, return, correlation and diversification on probable investment portfolio returns.
One important thing to understand about Modern Portfolio Theory (MPT) is Markowitz’s calculations treat volatility and risk as the same thing. In layman’s terms, Dr. Markowitz uses risk as a measurement of the likelihood that an investment will go up and down in value – and how often and by how much. The theory assumes that investors prefer to minimize risk. The theory assumes that given the choice of two portfolios with equal returns, investors will choose the one with the least risk. If investors take on additional risk, they will expect to be compensated with additional return.
According to MPT, risk comes in two major categories:
Systematic risk – the possibility that the entire market and economy will show losses negatively affecting nearly every investment; also called market risk
Unsystematic risk – the possibility that an investment or a category of investments will decline in value without having a major impact upon the entire market.
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Diversification generally does not protect against systematic risk because a drop in the entire market and economy typically affects all investments. However, diversification is designed to decrease unsystematic risk. Since unsystematic risk is the possibility that one single thing will decline in value, having a portfolio invested in a variety of stocks, a variety of asset classes and a variety of sectors will lower the risk of losing much money when one investment type declines in value. Thus putting together assets with low correlations can reduce unsystematic risks.
Although broad risks can be quickly summarized as “the failure to achieve spending and inflation-adjusted growth goals,” individual assets may face any number of other subsidiary risks:
Call risk – The risk, faced by a holder of a callable bond that a bond issuer will take advantage of the callable bond feature and redeem the issue prior to maturity. This means the bondholder will receive payment on the value of the bond and, in most cases, will be reinvesting in a less favorable environment (one with a lower interest rate)
Capital risk – The risk an investor faces that he or she may lose all or part of the principal amount invested.
Commodity risk – The threat that a change in the price of a production input will adversely impact a producer who uses that input.
Company risk – The risk that certain factors affecting a specific company may cause its stock to change in price in a different way from stocks as a whole.
Concentration risk – Probability of loss arising from heavily lopsided exposure to a particular group of counterparties
Counterparty risk – The risk that the other party to an agreement will default.
Credit risk – The risk of loss of principal or loss of a financial reward stemming from a borrower’s failure to repay a loan or otherwise meet a contractual obligation.
Currency risk – A form of risk that arises from the change in price of one currency against another.
Deflation risk – A general decline in prices, often caused by a reduction in the supply of money or credit.
Economic risk – the likelihood that an investment will be affected by macroeconomic conditions such as government regulation, exchange rates, or political stability.
Hedging risk – Making an investment to reduce the risk of adverse price movements in an asset.
Inflation risk – The uncertainty over the future real value (after inflation) of your investment.
Interest rate risk – Risk to the earnings or market value of a portfolio due to uncertain future interest rates.
Legal risk – risk from uncertainty due to legal actions or uncertainty in the applicability or interpretation of contracts, laws or regulations.
Liquidity risk – The risks stemming from the lack of marketability of an investment that cannot be bought or sold quickly enough to prevent or minimize a loss.
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
In order to create and monitor an investment portfolio for personal or institutional use, the physician executive, financial advisor, wealth manager, or healthcare institutional endowment fund manager, should ask three questions:
How much do we have invested?
How much did we make on our investments?
How much risk did we take to get that rate of return?
Introduction to the IPS
Most doctors, and hospital endowment fund executives, know how much money they have invested. If they don’t, they can add a few statements together to obtain a total. But, few can answers the questions above or actually know the rate of return achieved last year; or so far this year. Everyone can get this number by simply subtracting the ending balance from the beginning balance and dividing the difference. But, few take the time to do it. Why? A typical response to the question is, “We’re doing fine.”
Now, ask how much risk is in the portfolio and help is needed [risk adjusted rate of return]. In fact, Nobel laureate Harry Markowitz, Ph.D. said, “If you take more risk, you deserve more return.” Using standard deviation, he referred to the “variability of returns;” in other words, how much the portfolio goes up and down, its volatility [Markowitz, H: Portfolio Selection. Journal of Finance, March, 1952].
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 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
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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.
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.
Medpace isn’t a meme stock, but it still soared 54.67% yesterday. It was all thanks to a seriously impressive beat-and-raise earnings report for the clinical researcher.
It was also a great day for healthcare stocks: IQVIA climbed 17.92% after beating Wall Street forecasts last quarter.
DR Horton popped 17.02% after the homebuilder crushed Q3 earnings expectations.
It was also a great day for other homebuilders: Pultegroup rose 11.52% despite lower home closings last quarter, and management is optimistic that sales will bounce back next quarter.
NorthropGrumman gained 9.41% after a strong quarter, including an 18% increase in international sales for the defense contractor.
What’s down
LockheedMartin dropped 10.81% after the legacy defense contractor revealed big losses in its classified aeronautics program.
It wasn’t that great a day for defense contractors in general: RTX fell 1.58% after the company cut its earnings guidance.
General Motors may have beaten earnings expectations last quarter and kept its fiscal forecast intact, but investors didn’t like to hear about the $1.1 billion in tariff costs. Shares of the automaker stumbled 8.12%
Coca-Cola lost 0.59% after strong European sales helped the soft drink titan beat earnings estimates, but shareholders weren’t happy about weakness everywhere else.
Equifax tumbled 8.18% thanks to disappointing guidance for the current quarter from the consumer credit company.
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%.
Posted on July 22, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I.
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Stocks: Markets lost steam late in the trading session yesterday as investors awaited more earnings announcements, with the DJIA tumbling into the red. But the S&P 500 managed to end the day above 6,300 for the first time ever, while the NASDAQ enjoyed its sixth consecutive record close
FOMC: Over the weekend,President Trump disputed reports that Treasury Secretary Scott Bessent talked him out of firing Jerome Powell. Meanwhile, Bessent said that the entire Federal Reserve should be put under review.
Trade: Commerce Secretary Howard Lutnick reiterated that August 1st will be the “hard deadline” for countries to make a deal with the US. Both negotiations and tensions with the EU are ramping up as Trump threatens to slap the bloc with 30% levies.
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.
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.
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