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STOCK PERFORMANCE: Growth v. Value Investing for Physicians

Posted on June 22, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

BY DR. DAVID EDWARD MARCINKO: MBA MEd CMP™

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SPONSOR: http://www.MarcinkoAssociates.com

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Performance of Growth & Value Stocks

Although many academics argue that value stocks outperform growth stocks, the returns for individuals investing through mutual funds demonstrate a near match.

Introduction

A 2005 study Do Investors Capture the Value Premium? written by Todd Houge at The University of Iowa and Tim Loughran at The University of Notre Dame found that large company mutual funds in both the value and growth styles returned just over 11 percent for the period of 1975 to 2002. This paper contradicted many studies that demonstrated owning value stocks offers better long-term performance than growth stocks.

The studies, led by Eugene Fama PhD and Kenneth French PhD, established the current consensus that the value style of investing does indeed offer a return premium. There are several theories as to why this has been the case, among the most persuasive being a series of behavioral arguments put forth by leading researchers. The studies suggest that the out performance of value stocks may result from investors’ tendency toward common behavioral traits, including the belief that the future will be similar to the past, overreaction to unexpected events, “herding” behavior which leads at times to overemphasis of a particular style or sector, overconfidence, and aversion to regret. All of these behaviors can cause price anomalies which create buying opportunities for value investors.

Another key ingredient argued for value out performance is lower business appraisals. Value stocks are plainly confined to a P/E range, whereas growth stocks have an upper limit that is infinite. When growth stocks reach a high plateau in regard to P/E ratios, the ensuing returns are generally much lower than the category average over time.

Moreover, growth stocks tend to lose more in bear markets. In the last two major bear markets, growth stocks fared far worse than value. From January 1973 until late 1974, large growth stocks lost 45 percent of their value, while large value stocks lost 26 percent. Similarly, from April 2000 to September 2002, large growth stocks lost 46 percent versus only 27 percent for large value stocks. These losses, academics insist, dramatically reduce the long-term investment returns of growth stocks.

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However, the study by Houge and Loughran reasoned that although a premium may exist, investors have not been able to capture the excess return through mutual funds. The study also maintained that any potential value premium is generated outside the securities held by most mutual funds. Simply put, being growth or value had no material impact on a mutual fund’s performance.

Listed below in the table are the annualized returns and standard deviations for return data from January 1975 through December 2002.

Index Return SD

S&P 500 11.53% 14.88%

Large Growth Funds 11.30% 16.65%

Large Value Funds 11.41% 15.39%

Source: Hough/Loughran Study

The Hough/Loughran study also found that the returns by style also varied over time. From 1965-1983, a period widely known to favor the value style, large value funds averaged a 9.92 percent annual return, compared to 8.73 percent for large growth funds. This performance differential reverses over 1984-2001, as large growth funds generated a 14.1 percent average return compared to 12.9 percent for large value funds. Thus, one style can outperform in any time period.

However, although the long-term returns are nearly identical, large differences between value and growth returns happen over time. This is especially the case over the last ten years as growth and value have had extraordinary return differences – sometimes over 30 percentage points of under performance.

This table indicates the return differential between the value and growth styles since 1992.

YEARLY RETURNS OF GROWTH/VALUE STOCKS

Year	Growth	Value
1992	5.1%	10.5%
1993	1.7%	18.6%
1994	3.1%	-0.6%
1995	38.1%	37.1%
1996	24.0%	22.0%
1997	36.5%	30.6%
1998	42.2%	14.7%
1999	28.2%	3.2%
2000	-22.1%	6.1%
2001	-26.7%	7.1%
2002	-25.2%	-20.5%
2003	28.2%	27.7%
2004	6.3%	16.5%
2005	3.6%	6.1%
2006	10.8%	20.6%
2007	8.8%	1.5%
2008	-38.43%	-36.84%
2009	37.2%	19.69%
2010	16.71%	15.5%
2011	2.64%	0.39%
2012	15.25%	17.50%

Source: Ibbottson.

Between the third quarter of 1994 and the second quarter of 2000, the S&P Growth Index produced annualized total returns of 30 percent, versus only about 18 percent for the S&P Value Index. Since 2000, value has turned the tables and dramatically outperformed growth. Growth has only outperformed value in two of the past eight years. Since the two styles are successful at different times, combining them in one portfolio can create a buffer against dramatic swings, reducing volatility and the subsequent drag on returns.

Assessment

In our analysis, the surest way to maximize the benefits of style investing is to combine growth and value in a single portfolio, and maintain the proportions evenly in a 50/50 split through regular rebalancing. Research from Standard & Poor’s showed that since 1980, a 50/50 portfolio of value and growth stocks beats the market 75 percent of the time.

Conclusion

Due to the fact that both styles have near equal performance and either style can outperform for a significant time period, a medical professional might consider a blending of styles. Rather than attempt to second-guess the market by switching in and out of styles as they roll with the cycle, it might be prudent to maintain an equal balance your investment between the two.

EDUCATION: Books

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 a RFP for speaking engagements: MarcinkoAdvisors@outlook.com

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PARADOXICAL CONTRADICTIONS: All Financial Advisors Must Know to Win Clients!

Posted on June 20, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

The Ultimate Psychological Challenge to Influence Clients and Close More Sales

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By Dr. David Edward Marcinko MBA MEd CMP™

SPONSOR: http://www.CertifiedMedicalPlanner.org

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A psychological paradox is a figure of speech that can seem silly or contradictory in form, yet it can still be true, or at least make sense in the context given.

This is sometimes used to illustrate thoughts or statements that differ from traditional ideas. So, instead of taking a given statement literally, an individual must comprehend it from a different perspective. Using paradoxes in speeches and writings can also add wit and humor to one’s work, which serves as the perfect device to grab a reader or a listener’s attention and/or persuade them to action, sales and closing statements. But paradoxes for the financial sector can be quite difficult to explain by definition alone, which is why it is best to refer to a few examples to further your understanding.

One good psychological paradox example is The Paradox of Thrift which suggests that while saving money is generally considered a prudent financial behavior, excessive saving during times of economic downturn can actually hinder economic recovery. When consumers collectively reduce their spending and increase their savings, it creates a decrease in aggregate demand. This reduction in demand can lead to lower production levels, job losses, and ultimately a decline in economic output. In other words, what may be individually rational behavior (financial saving) can have negative consequences for the overall economy.

The following paradoxical contradictions will help financial advisors guide clients to close more sales to the benefit of both.

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In the intricate world of finance sales, advisors are often at the crossroads of various paradoxes that challenge client decision-making. While the journey towards financial security involves calculated strategies, it’s the nuanced understanding of paradoxes that can help the advisor close more sales.

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But, what seems true about money often turns out to be false, according to colleague Finance Professor John Goodell, PhD from the University Akron:

The more we try to trade our way to profits, the less likely we are to profit.

The more boring an investment—think index funds—the more exciting the long-run performance will probably be.

The more exciting an investment—name your latest Wall Street concoction, Special Purpose Acquisition Company [SPAC] or anything crypto—the less exciting the long-term results typically are.

The only certainty is uncertainty and the only constant is change. Today’s market decline will eventually become a bull market, and today’s market leaders will eventually yield to other stocks.

Big market trends play a huge role in investment results, and yet trying to time macroeconomic cycles or guess which market sectors will outperform is a fool’s errand. Many big market rotations are set in motion by something wholly unanticipated, like a virus pandemic or a war.

To be happy when wealthy, we also need to be happy with far less money. The fact is, above a relatively modest income level, no amount of extra money will change our level of happiness. More money might even make us miserable, as many lottery winners have discovered.

The more we hate an investing trait—or any trait for that matter—the more likely it is that we’re resisting seeing that trait in ourselves. It’s what Carl Jung MD called the Shadow of Undesirable Personality Aspects that we hide from ourselves. Do prospects get irritated listening to your unsolicited financial advice? There’s a good chance that you often give unsolicited financial advice but don’t like to admit it.

The more we learn about investing, the more we realize we don’t know anything. We should just buy index funds and instead spend our time worrying about stuff we can actually control.

The more an investor is convinced he’s right, the more likely he is to be wrong. Short sellers, in particular, are likely to succumb to this paradoxical trap.

The more options we have, the less satisfied we’ll be with each one. This is the Paradox of Choice; revised. Anyone who has spent hours “optimizing” his or her portfolio knows this all too well. Its close cousin is information overload, another frustration paradox when investing.

The more afraid we are of losing money, the more likely we are to take unwitting risks that lose us money. Sitting in cash seems wise during market selloffs. But the truth is, none of us can reliably time the market. Pull up any chart of the stock market over any period longer than a decade and you’ll see that the riskiest decision is sitting in cash, which gets destroyed by inflation.

The more we think about our investments and look at our financial accounts, the more likely we are to damage our results by buying high because of greed and selling low because of fear. It can pay to look away.

ASSESSMENT

How should you respond to these financial paradoxes? As you plan for your own financial future, as well as your own client prospecting endeavors, embrace the concept of “loosely held views.”

In other words, make financial and client acquisitions plans, but continuously update your views, question your assumptions and paradoxes and rethink your priorities. Years of experience with clients certainly support the futility of trying to help them change their financial behavior by telling them what they “should” know or do.

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 paradoxes to your mutual success!

EDUCATION: Books

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:

1. Goodell, J: Full publication list on Google Scholar: https://scholar.google.com/citations?hl=en&user=lJyDADsAAAAJ

2. Jung, Carl, Gustav: Full publication list on Google Scholar: https://scholar.google.com/scholar?hl=en&as_sdt=0%2C11&q=carl+jung+publications&btnG=

READINGS:

Marcinko, DE and Hetico, HR: Comprehensive Financial Planning Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™]. CRC Productivity Press, New York, 2016.

Marcinko, DE: Dictionary of Health Economics and Finance. Springer Publishing Company, New York. 2006

Marcinko, DE and Hetico, HR: Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™]. CRC Productivity Press, New York, 2015.

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ASSETS: Under Advisement V. Management

Posted on June 20, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

SPONSOR: http://www.MarcinkoAssociates.com

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What are Assets Under Management?

Assets under management (AUM) is a significant parameter in the financial world. It answers financial questions like – how many investments does a company manage? What is the net value of the investments that the company manages? Finally, how many investors have trusted their assets with the company? The higher the answer to these three questions, the more glory to the company.

A wealthy investor who is not concerned by higher fees but wants maximum returns of their asset will probably choose an asset manager based on its AUM. Thus, the AUM indicates the financial performance of the firm. Also, based on the funds under management, the firm collects fees from other clients.

So, what are the investments which qualify as AUM? Any liquid asset of the investor they have entrusted the asset manager with monitoring and control. For example, bank deposits, cash balances, equity shares, bonds, mutual funds, and other investments.

What are the services an asset manager provides to their clients? The most important function is decision-making. With the constant fluctuations and rapid movements in the market, an asset manager has to make decisions about holding or selling an investment. The firm communicates with the investors and advises them about the necessary action.

Once the decision is taken, the firm acts on the decision, i.e., the investor does not have to enter the field. In addition, the asset management company will buy, sell, and make any other transactions on behalf of the investor. Finally, the firm also renders services like accounting, tax reporting, proxy voting (equity shares), client reporting, and other financial services.

What are Assets Under Advisement?

Assets under advisement refer to assets on which your firm provides advice or consultation but for which your firm does either does not have discretionary authority or does not arrange or effectuate the transaction. Such services would include financial planning or other consulting services where the assets are used for the informational purpose of gaining a full perspective of the client’s financial situation, but you are not actually placing the trade.

Assets under advisement could also be those which you monitor for a client on a non-discretionary basis, where you may make recommendations but where the client is the party responsible for arranging or effecting the purchase or sale. A common example of this scenario is when an adviser reviews a participant’s 401(k) allocations. If the adviser does not have the authority or ability to effect changes in the portfolio, these assets are likely considered assets under advisement rather than regulatory assets under management.

Assets under advisement are permitted to be disclosed on Form ADV Part 2A as a separate asset figure from the assets under management. There is no requirement to disclose the assets under advisement figure, but some advisers opt to include the figure to give prospective clients a more complete picture of the firm’s responsibilities. If you choose to report your assets under advisement, be sure to make a clear distinction between this figure and your regulatory assets under management.

NOTE: Essay with thanks to Chat GPT.

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CORRELATION: Diversification in Finance and Investments

Posted on June 17, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

SPONSOR: http://www.MarcinkoAssociates.com

DEFINITION

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Correlation measures the relationship between two investments–the higher the correlation, the more likely they are to move in the same direction for a given set of economic or market events. Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient which has a value that must fall between -1.0 and +1.0.

So if two securities are highly positively correlated, they will move in the same direction the vast majority of the time. Negatively correlated investments do the opposite–as one security rises, the other falls, and vice versa. No correlation means there is no relationship between the movement of two securities–the performance of one security has no bearing on the performance of the other.

CAUSATION: https://medicalexecutivepost.com/2024/06/05/correlation-is-not-causation/

Correlation is an important concept for portfolio diversification--combining assets with low or negative correlations can improve risk-adjusted performance over time by providing a diversity of payouts under the same financial conditions.

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DAILY UPDATE: Medicaid, HIV Vaccine, CDC and the Rising Stock Markets

Posted on June 17, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants

“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“

A Partner of the Institute of Medical Business Advisors , Inc.

http://www.MedicalBusinessAdvisors.com

SPONSORED BY: Marcinko & Associates, Inc.

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http://www.MarcinkoAssociates.com

Daily Update Provided By Staff Reporters Since 2007.
How May We Serve You?

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ADVERTISE ON THE ME-P: https://tinyurl.com/ytb5955z

Your Referral Count -0-

CITE: https://www.r2library.com/Resource

Stat: 2%. That’s the portion of Medicaid expansion enrollees who were either not working or in school due to “lack of interest” in finding a job. (Robert Wood Johnson Foundation)

Quote: “It’s just devastating. So much human toil has gone into this. Just when it looked like we could beat this virus, we’re going to give up.”—Dennis Burton, a Scripps Research Institute immunologist, on how a new HIV vaccine was about to start clinical trials before federal funding cuts (NPR)

Read: A look at HHS Secretary RFK Jr.’s new appointees to the CDC vaccine advisory panel. (Stat)

CITE: https://tinyurl.com/2h47urt5

🟢 What’s up

The wait is finally over: US Steel climbed 5.10% after President Trump signed an executive order approving its takeover by Nippon Steel.
Roku jumped 10.43% after announcing a partnership with Amazon that gives advertisers the ability to reach roughly 80% of American households with connected TVs.
Advanced Micro Devices rose 8.81% on an upgrade from Piper Sandler analysts, who think the semi stock’s AI business will boom.
EchoStar exploded 49.11% after Trump pushed the FCC to resolve its ongoing spectrum dispute with the satellite company.
Victoria’s Secret rose 2.36% on reports that the struggling retailer has attracted the attention of an activist investor.
Sage Therapeutics soared 35.37% on the news that it will be acquired by Supernus Pharmaceuticals in a $795 million deal.
MGM Resorts climbed 8.10% after the casino company revealed that its Bet MGM online gambling platform is expected to pull in more revenue than previously thought.
Kering, the parent company of Gucci, Yves Saint Laurent, and other luxury brands, popped 12.37% on the news that it has convinced Renault’s CEO to run the company.

What’s down

Sarepta Therapeutics plunged 42.12% after the pharma company reported a second death of a patient taking its Duchenne muscular dystrophy treatment Elevidys.
Reports that Iran wants to end hostilities pushed oil prices lower this afternoon, hurting shares of energy stocks like APA Corp (down 2.43%), Devon Energy (down 1.45%) and ConocoPhillips (down 2.02%).

CITE: https://tinyurl.com/tj8smmes

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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EDUCATIONAL TEXTBOOKS: https://tinyurl.com/4zdxuuwf

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ETFs: Alternatively Weighted Investments

Posted on June 16, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

DEFINITION

By Staff Reporters

SPONSOR: http://www.MarcinkoAssociates.com

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Alternatively Weighted Exchange Traded Funds are designed to track an index that is constructed based on criteria other than market capitalization (the methodology used for most traditional indexes).

Instead, alternatively weighted indexes select and weight securities based on other factors, such as growth, valuation, and price momentum, among others. Examples include:

Invesco S&P 500 Equal Weight ETF (NYSEARCA: RSP)

SPDR Technology ETF (NYSEARCA: XNTK)

First Trust NYSE Arca Biotechnology Index Fund (NYSEARCA: FBT)

Amplify Online Retail ETF (NASDAQ: IBUY)

iShares MSCI USA Equal Weighted ETF (NYSEARCA: EUSA)

ALPS Equal Sector Weight ETF (NYSEARCA: EQL)

These may also be known as “smart beta” funds.

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MUTUAL FUNDS, SECTOR FUNDS, ETFs & INDEX FUNDS

Posted on June 15, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Dr. David Edward Marcinko MBA MEd CMP™

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MUTUAL FUNDS, SECTOR FUNDS, ETFs AND INDEX FUNDS

SPONSOR: http://www.MarcinkoAssociates.com

here are many ways for a doctor, osteopath, podiatrist or dentist to financially invest. Traditionally, this meant picking individual stocks and bonds. Today, there are many other ways to purchase securities en mass. For example:

MUTUAL FUND: A regulated investment company that manages a portfolio of securities for its shareholders.

Open End Mutual Funds: An investment company that invests money in accordance with specific objectives on behalf of investors. Fund assets expand or contract based on investment performance, new investments and redemptions. Trade at Net Asset Value or the price the fund shares scheduled with the US Securities and Exchange Commission (SEC) trade. NAV can change on a daily basis. Therefore, per-share NAV can, as well.

Closed End Mutual Funds: Older than open end mutual funds and more complex. A CEMF is an investment company that registers shares SEC regulations and is traded in securities markets at prices determined by investments. Shares of closed-end funds can be purchased and sold anytime during stock market hours. CEMF managers don’t need to maintain a cash reserve to redeem or / repurchase shares from investors. This can reduce performance drag that may otherwise be attributable to holding cash. CEMFs may be able to offer higher returns due to the heavier use of leverage [debt]. They are subject to volatility, less liquid than open-end funds, available only through brokers and may sells at a heavily discount or premium to [NAV] determined by subtracting its liabilities from its assets. The fund’s per-share NAV is then obtained by dividing NAV by the number of shares outstanding. .

Sector Mutual Funds: Sector funds are a type of mutual fund or Exchange-Traded Fund (ETF) that invests in a specific sector or industry such as technology, healthcare, energy, finance, consumer goods, or real estate. Sector funds focus on a particular industry, allowing investors to gain targeted exposure to specific market areas. The goal is to outperform the overall market by investing in companies within a specific sector that is expected to perform well. However, they are also more susceptible to market fluctuations and specific sector risks, making them a more specialized and potentially higher-risk investment option.

STOCKS, BONDS AND MUTUAL FUNDS: https://medicalexecutivepost.com/2025/06/11/stocks-bonds-and-commodities/

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EXCHANGE TRADED FUNDS: ETFs are a type of fund that owns various kinds of securities, often of one type. For example, a stock ETF holds stocks, while a bond ETF holds bonds. One share of the ETF gives buyers ownership of all the stocks or bonds in the fund. If an ETF held 100 stocks, then those who owned the fund would own a stake – albeit a very tiny one – in each of those 100 stocks.

ETFs are typically passively managed, meaning that the fund usually holds a fixed number of securities based on a specific preset index of investments. These are tax efficient. In contrast, many mutual funds are actively managed, with professional investors trying to select the investments that will rise and fall.

The Standard & Poor’s 500 Index is perhaps the world’s best-known index, and it forms the basis of many ETFs. Other popular indexes include the Dow Jones Industrial Average and the National Association of Securities Dealers Automated Quotations [NASDAQ] Composite Index.

ETFs based on these funds are called Index Funds and just buy and hold whatever is in the index and make no active trading decisions. ETFs trade on a stock exchange during the day, unlike mutual funds that trade only after the market closes. With an ETF you can place a trade whenever the market is open and know exactly the price you’re paying for the fund.

ETFs: https://medicalexecutivepost.com/2025/01/06/etfs-alternatively-weighted-investments/

INDEX FUNDS: Index funds mirror the performance of benchmarks like the DJIA. These passive investments are an unimaginative way to invest. Passive index funds tracking market benchmarks accounted for just 21% of the U.S. equity fund market in 2012. By 2024, passive index funds had grown to about half of all U.S. fund assets. This rise of passive funds has come as they often outperform their actively managed peers. According to the widely followed S&P Indices Versus Active (SPIVA) scorecards, about 9 out of 10 actively managed funds didn’t match the returns of the S&P 500 benchmark in the past 15 years.

ASSESSMENT

Investing in individual stocks is psychologically and academically different than investing in the above funds, according to psychiatrist and colleague Ken Shubin-Stein MD, MPH, MS, CFA who is a professor of finance at the Columbia University Graduate School of Business When you buy shares of a company, you are putting all your eggs in one basket. If the company does well, your investment will go up in value. If the company does poorly, your investment will go down. Fund diversification helps reduce this risk.

CONCLUSION

Investing in the above fund types will help mitigate single company security risk.

References:

1. Fenton, Charles, F: Non-Disclosure Agreements and Physician Restrictive Covenants. In, Marcinko, DE and Hetico, HR: Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™]. Productivity Press, New York, 2015.

Readings:

1. Marcinko, DE and Hetico, HR; Comprehensive Financial Planning Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™] Productivity Press, New York, 2017

2. Marcinko, DE: Dictionary of Health Economics and Finance. Springer Publishing Company, NY 2006

3. https://www.ft.com

4. Shubin-Stein, Kenneth: Unifying the Psychological and Financial Planning Divide [Holistic Life Planning, Behavioral Economics, Trading Addiction and the Art of Money]. Marcinko, DE and Hetico, HR; Comprehensive Financial Planning Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™] Productivity Press, New York, 2017

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EDUCATION: Books

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MARCINKO ASSOCIATES: How our Second Investment Portfolio Opinions are Different?

Posted on June 13, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

SPONSOR: http://www.MarcinkoAssociates.com

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We make second investment portfolio opinions affordable

Approximately 1 million allopathic physicians, 150,000 dentists, 200,000 osteopaths, 15,000 podiatrists and 6 million nurses often find it difficult to get an unbiased and fiduciary second opinion on their retirement or brokerage accounts. By offering second opinions for a flat fee, the monetary barriers that prevented colleagues from receiving a second opinion in the past have been removed.

We make second investment portfolio opinions convenient

Here’s how we work: you book an initial appointment with us, answer a few preliminary questions and email us your portfolio information. We then provide a second opinion. It is then up to you to incorporate or not.

INVESTMENT ADVISORY: https://medicalexecutivepost.com/2025/05/04/investment-advisory-portfolio-second-opinions-for-physician-colleagues/

We make second investment portfolio opinions timely

Financial markets, jobs and colleague age change like the weather. It is not always okay to wait a week, year or more, to seek a professional second financial portfolio opinion. You need to receive an opinion now. That’s where we come in. We are standing by, ready to take your email [MarcinkoAdvisors@outlook.com] and schedule a free initial consultation within two or three days, or less.

ASSET ALLOCATION: https://medicalexecutivepost.com/2024/10/23/musings-on-a-famous-portfolio-asset-allocation-study-3/

We make second investment portfolio opinions accurate

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Simplifying the Investment Decision

Posted on June 12, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

A Basic Overview for Emerging Physician and Medical Professional Investors

By Somnath Basu; PhD, MBA

There are three basic considerations in any investment decision.

1] The first is the understanding of the investment objective or why the investment is being made. While this may seem somewhat irrelevant at first – why would you be investing if you do not know what you are doing – combining investment objectives can pose problems down-stream.

For example, if you are saving for your retirement so that you can afford the retirement lifestyle you desire (the investment objective), your saving plan should not include any savings you are making for your children’s education (a separate investment objective). Compounding the two savings streams in one plan can very easily lead to one or both of the plans failing.

2] The second consideration is the time horizon of the investment. As a rough guide, investments that need to mature in the next 5-7 years can be considered as short term, 8-15 years as medium term and the rest as long term.

3] Finally, and probably the most important consideration of all is the importance you attach (priority) to achieving your investment objective; in other words, how safe and secure should your investments be. For example, if you are 70 years old and considering how you should invest your retirement funds so that your expenses are covered say for the next 25 years, you do not want a large margin of error in how your investments turn out; you can ill afford to be broke when you are older and hence you want your investments to be as secure as possible.

On the other hand, if the investment is for a second home or a boat, for example, you may wish to engage in some risk taking which may help in lowering your upfront investment needs. It is very important for any investor to clearly understand how much loss they can bear from any investment decision.

Decision Matrix

It is useful to express the investment framework described above as a simple decision matrix. Using the matrix (shown below) as a decision support system should clarify and simplify most investment decisions.

Link: Investment Scenarios

Understanding where in the matrix your decision falls is a very good first step of your decision. Both these elements (safety and time) will ultimately decide the kinds of financial instruments that will reside in your portfolio. We will examine the structure of each of the 9 possible combinations shown in the matrix. Before doing so, let us start by examining the various investment alternatives (e.g. stocks, bonds, etc.) since they have an implicit connection with the two dimensions portrayed in our matrix.

Stocks

Stocks are the most well known and popular form of financial investments. Stocks may be further segregated between large cap and small cap stocks, where the term “cap” is surrogate for the size of the underlying corporation or firm.

Stocks may represent investments in both domestic and international companies. Within the international category, stocks may represent corporations registered in developed (safer) or emerging (riskier) markets. In terms of our matrix dimensions, stocks are best suited when the decision is of medium or long term. In terms of safety, large cap (both domestic and international) stocks are the safest, while small cap and emerging market stocks are the most risky. The riskier the stock, the greater are the profit possibilities as are the chances of large losses.

Bonds

The second common type of investment are bonds Generally, bonds are much safer than stocks with the exception of a class of bonds known as high yield (or junk) bonds. Bonds are issued by companies, governments (domestic and international) and other agencies such as local governments (municipal bonds or “munis” which are especially desirable for those in high income tax rate categories) and quasi-government agencies such as Federal Home Loan Bank, Student Loan Administration, Agricultural Cooperative Banks, etc (collectively known as “Agency” bonds such as Ginnie/Fannie/Sallie Mae, Freddie Mac, etc.).

Government bonds are the safest, followed by agency and municipal bonds and then by bonds issues by corporations.

Corporate bonds may be safe (which are assigned credit safety ratings such as AAA, AA, BBB, etc.) or risky (junk bonds with ratings such as BB, CCC, CC etc.).

Bonds can be used for all time horizons, their maturities ranging from 3 months to 30 years. Very short term bond and bond like instruments (with maturities of one year or less) are known as money market securities which are generally safer than most other investments.

Alternate Investments

Other types of investments include real estate (long term, risky), commodities (such as energy, basic building materials, precious metals, etc.) which are also risky and which may be used for both short term and long term purposes and provide a good hedge (counter balance) in an inflationary environment, derivatives (options and futures) which are very risky and typically short term in nature. Derivatives are generally suggested for very sophisticated investors and are best left alone otherwise.

Risk Reduction

A very important feature about investments is that when various types of investments are bundled together in a portfolio, they help to reduce the risk of the investment decision without affecting the profits in a comparable way. This basic aspect of mixing various kinds of investments (stocks, bonds, etc) to reduce risk is known as diversification and it is a “must” for any investment portfolio. It is a “must” because this technique of risk reduction is generally costless (unless you are paying a financial advisor to do this for you) and it is very worthwhile. All other methods of risk reduction have cost implications.

Scenario Matrix

Armed with this nomenclature regarding various investment types we can now go about examining what the 9 combination (Scenario) portfolios may look like for investment purposes.

Link: Investment Scenarios

Starting with Scenario 1, if you wish to make a short term decision that is very important to you and needs to be very safe, investments should be made in very short term bonds (government or treasury bills)and other similar money market (short term, safe) securities. International short term bonds of developed countries may also be included. Such investment products are generally available through mutual funds or Exchange Traded Funds (or ETFs). ETFs are just like mutual funds except that they are usually cheaper, much easier to buy and sell and may provide tax deferral benefits.

If your investment falls in the Scenario 2 category, include agency/municipal bonds as well as some domestic and international (developed country) large cap stocks while for Scenario 3, smaller portions of small cap and emerging market stocks may be added proportionately while reducing some of the safer investments.

If your investment was a Scenario 4 type of investment, corporate large cap stocks (both domestic and international) could be added to agency or corporate (domestic and international) bonds. Before investing in stocks (in any Scenario) for this Scenario 4, a good question to ask is the following: how profitable were stock investments in the last 3-5 years? If the answer is “very profitable” then reduce the proportion of stocks as compared to bonds in the portfolio. If the last few years were not good, then it would be good to increase their comparable shares. The main reason for this “fine tuning” is that the fortunes of stocks (and many other types of investments) follow a cyclical pattern and the cycle is related to the general cycle of economic (GDP) growth and contraction.

It can be seen now how Scenarios 5 and 6 (as also 8 and 9) will follow a similar pattern as before, increasing proportionally in stocks (of all sizes, domestic/international), real estate, commodities, etc. Portfolios falling in these groups may also include some small cap and emerging market stocks as well as high yield or junk bonds. The proportion of these riskier investments would of course be higher for Scenario 6 over Scenario 5 (and Scenario 9 over 8).

For Scenario 7, the investment portfolio would typically resemble one that would be like an opposite of the portfolio in Scenario 1 and would include a greater proportion of large cap (domestic/international) stocks and a much smaller proportion of bonds. As we move towards Scenarios 8 and 9, the portfolios would be dominated by small cap and emerging market stocks as well as junk bonds.

Assessment

In the discussion above, I have tried to generalize the investment decision in a simplifying way. While the discussion may have centered more on stocks and bonds, it is important to note that all portfolios must “diversify” the investment risks by expanding upon the various types of investment products contained in the portfolios. The very fact that a portfolio contains various types of investments will ensure that the portfolio will perform better than those which are not as well diversified. This will be so in spite of any one of the investment types underperforming at any point in time and the diversification benefit will be received consistently over long periods of time. A popular analogy to this diversification benefit is the common phrase of not putting all eggs in one basket.

Editor’s Note: Somnath Basu PhD is program director of the California Institute of Finance in the School of Business at California Lutheran University where he’s also a professor of finance. He can be reached at (805) 493 3980 or basu@callutheran.edu

Conclusion

The above approach to investment decision-making can be considered as a basic template that can be used universally. For those seeking greater sophistication and who have a foundation built on the above model, expert advice is strongly recommended.

And so, your thoughts and comments on this ME-P are appreciated. Financial advisors please chime in on the debate? Is Basu correct; why or why not? Review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe to the ME-P. It is fast, free and secure.

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DOCTOR INVESTING MISTAKES: Top Five PLUS 1 Vital Tip

Posted on June 11, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

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By Dr. David Edward Marcinko MBA MEd CMP™

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FIVE INVESTING MISTAKES OF DOCTORS; PLUS 1 VITAL TIP

As a former US Securities and Exchange Commission [SEC] Registered Investment Advisor [RIA] and business school professor of economics and finance, I’ve seen many mistakes that doctors must be aware of, and most importantly, avoid. So, here are the top 5 investing mistakes along with suggested guideline solutions.

Mistake 1: Failing to Diversify Investment but Beware Di-Worsification

A single investment may become a large portion of your portfolio as a result of solid returns lulling you into a false sense of security. The Magnificent Seven stocks are a current example:

Apple, up +5,064%% since 1/18/2008
Amazon, up +30,328% since 9/6/2002
Alphabet, up +1,200% since 7/20/2012
Tesla, up +21,713% since 11/16/2012
Meta, up +684% since 2/20/2015
Microsoft, up +22% since 12/21/2023
Nvidia, up +80,797% since 4/15/2005

Guideline: The Magnificent Seven [7] has grown from 9% of the S&P 500 at the end of 2013 to 31% at the end of 2024! That means even if you don’t own them, you’re still very exposed if you have an Index Fund [IF] or Exchange Traded Fund [ETF] that tracks the market. Accordingly, diversification is the only free lunch in investing which can reduce portfolio risk. But, remember the Wall Street insider aphorism that states: “Di-Versification Means Always Having to Say Your Sorry.”

The term “Di-Worsification” was coined by legendary investor Peter Lynch in his book, One Up On Wall Street to refer to over-diversifying an investment portfolio in such a way that it reduces your overall risk-return characteristics. In other words, the potential return rises with an increase in risk and invested money can render higher profits only if willing to accept a higher possibility of losses [1].

IPO: https://medicalexecutivepost.com/2025/03/02/ipo-road-show-with-pros-and-cons/

Mistake 2: Chasing Stock Market Performance

A podiatrist can easily fall into the trap of chasing securities or mutual funds showing the highest return. It is almost an article of faith that they should only purchase mutual funds sporting the best recent performance. But in fact, it may actually pay to shun mutual funds with strong recent performance. Unfortunately, many struggle to appreciate the benefits of their investment strategy because in jaunty markets, people tend to run after strong performance and purchase last year’s winners.

Similarly, in a market downturn, investors tend to move to lower-risk investment options, which can lead to missed opportunities during subsequent market recoveries. The extent of underperformance by individual investors has often been the most awful during bear markets. Academic studies have consistently shown that the returns achieved by the typical stock or bond fund investors have lagged substantially.

Guideline: Understand chasing performance does not work.Continually monitor your investments and don’t feel the need to invest in the hottest fund or asset category. In fact, it is much better to increase investments in poor performing categories (i.e. buy low). Also keep in remind rebalancing of assets each year is key. If stocks perform poorly and bonds do exceptionally well, then rebalance at the end of the year. In following this strategy, this will force a doctor into buying low and selling high each year.

STOCKS: https://medicalexecutivepost.com/2025/04/18/stocks-basic-definitions/

Mistake 3: Assuming Annual Returns Follow Historical Averages

Often doctors make their investment decisions under the belief that stocks will consistently give them solid double-digit returns. But the stock markets go through extended long-term cycles.

In examining stock market history, there have been 6 secular bull markets (market goes up for an extended period) and 5 secular bear markets (market goes down) since 1900. There have been five distinct secular bull markets in the past 100+ years. Each bull market lasted for an extended period and rewarded investors.

For example, if an investor had started investing in stocks either at the top of the markets in 1966 or 2000, future stock market returns would have been exceptionally below average for the proceeding decade. On the other hand, those investors fortunate enough to start building wealth in 1982 would have enjoyed a near two-decade period of well above average stock market returns. They key element to remember is that future historical returns in stocks are not guaranteed. If stock market returns are poor, one must consider that he or she will have to accept lower projected returns and ultimately save more money to make up for the shortfall. For example,

The May 6th, 2010, flash crash, also known as the crash of 2:45, was a United States trillion-dollar stock market plunge which started at 2:32 pm EST and lasted for approximately 36 minutes.

And, investors who have embraced the “buy the dip” strategy in 2025 have been handsomely rewarded, with the S&P 500 delivering its strongest post-pull back returns in over three decades.

According to research from Bespoke Investment Group, the S&P 500 has gained an average of 0.36% in the trading session following a down day so far in 2025. The only year with a comparable performance was 2020, which saw a 0.32% average post-dip gain [2].

The most recent example came on May 27, 2025 when the S&P 500 surged more than 2% after falling 0.7% in the final session before the holiday weekend. The rally was sparked by President Trump’s decision to scale back huge previously threatened tariffs on EU —a recurring catalyst behind many of 2025’s rebound.

Guideline: Beware of projecting forward historical returns. Doctors should realize that the stock markets are inherently volatile and that, while it is easy to rely on past historical averages, there are long periods of time where returns and risk deviate meaningfully from historical averages.

REVENUE BONDS: https://medicalexecutivepost.com/2024/12/20/bonds-revenue/

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Mistake 4: Attempting to Time the Stock Market

Some doctors believe they are “smarter than the market” and can time when to jump in and buy stocks or sell everything and go to cash. Wouldn’t it be nice to have the clairvoyance to be out of stocks on the market’s worst days and in on the best days?

Using the S&P 500 Index, our agile imaginary doctor-investor managed to steer clear of the worst market day each year from January 1st, 1992 to March 31st, 2012. The outcome: s/he compiled a 12.42% annualized return (including reinvestment of dividends and capital gains) during the 20+ years, sufficient to compound a $10,000 investment into $107,100.

But what about another unfortunate doctor-investor that had the mistiming to be out of the market on the best day of each year. This ill-fated investor’s portfolio returned only 4.31% annualized from January 1992 – March 2012, increasing the $10,000 portfolio value to just $23,500 during the 20 years. The design of timing markets may sound easy, but for most all investors it is a losing strategy.

More contemporaneously on December 18^th 2024, the DJIA plummeted 2.5%, while the S&P 500 declined 3% and the NASDAQ tumbled 3.5%

Guideline: If it looks too good to be true, it probably is. While jumping into the market at its low and selling right at the high is appealing in theory, we should recognize the difficulties and potential opportunity and trading costs associated with trying to time the stock market in practice. In general, colleagues are be best served by matching their investment with their time horizon and looking past the peaks / valleys along the way.

ALTERNATIVE INVESTMENTS: https://medicalexecutivepost.com/2025/05/12/stocks-and-alternative-investments/

Mistake 5: Failing to Recognize the Impact of Fees and Expenses

A free dinner seminar or a polished stock-broker sales pitch may hide the total underlying costs of an investment. So, fees absolutely matter.

The first costing step is determining what the fees actually are. In a mutual fund, these costs are found in the company’s obligatory “Fund Facts”. This manuscript clearly outlines all the fees paid–including up front fees (commissions and loads), deferred sales charges and any switching fees. Fund management expense ratios are also part of the overall cost. Trading costs within the fund can also impact performance.

Here is a list of the traditional mutual fund fees:

Front End Load: The commission charged to purchase a fund through a stock broker or financial advisor. The commission reduces the amount you have available to invest. Thus, if you start with $100,000 to invest, and the advisor charges up to an 8 percent front end load, you end up actually investing $92,000.

Deferred Sales Charge (DSC) or Back End Load: Imposed if you sell your position in the mutual fund within a pre-specified period of time (normally one – five years). It is initiated at a higher start percentage (i.e. as high as 10 percent) and declines over a specific period of time.

Operating Fees: Costs of the mutual fund including the management fee rewarded to the manager for investment services. It also includes legal, custodial, auditing and marketing fees.

Annual Administration Fee: Many mutual fund companies also charge a fee just for administering the account – usually under $100-150 per year.

Guideline: Know and understand all fees.

For example: A 1 percent disparity in fees may not seem like much but it makes a considerable impact over a long time period.

Consider a $100,000 portfolio that earns 8 percent before fees, grows to $320,714 after 20 years if the investor pays a 2 percent operating fee. In comparison, if s/he opted for a fund that charged a more reasonable 1 percent fee, after 20 years, the portfolio grows to be $386,968 – a divergence of over $66,000!

This is the value of passive or index investing. In the case of an index fund, fees are generally under 0.5 percent, thus offering even more savings over a long period of time.

One Vital Tip: Investing Time is on Your Side

Despite thousands of TV shows, podcasts, textbooks, opinions and university studies on investing, it really only has three simple components. Amount invested, rate of return and time. By far, the most important item is time! For example:

Nvidia: if you invested $1,000 in 2009, you’d have $338,103 today.
Apple: if you invested $1,000 in 2008, you’d have $48,005 today.
Netflix: if you invested $1,000 in 2004, you’d have $495,679 today.

Start prudently investing now and do not wait!

ETFs: https://medicalexecutivepost.com/2025/01/06/etfs-alternatively-weighted-investments/

CONCLUSION

Unfortunately, this list of investing mistakes is still being made by many doctors. Fortunately, by recognizing and acting to mitigate them, your results may be more financially fruitful and mentally quieting.

REFERENCES:

1. Lynch, Peter: One Up on Wall Street [How to Use What You Already Know to Make Money in the Market]: Simon and Shuster (2^nd edition) New York, 2000.

2. https://www.bespokepremium.com

Readings:

1. Marcinko, DE; Comprehensive Financial Planning Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™] Productivity Press, New York, 2017.

2. Marcinko, DE: Dictionary of Health Economics and Finance. Springer Publishing Company, New York, 2006.

3. Marcinko, DE; Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™] CRC Press, New York, 2015.

BIO: As a former university Professor and Endowed Department Chair in Austrian Economics, Finance and Entrepreneurship, the author was a NYSE Registered Investment Advisor and Certified Financial Planner for a decade. Later, he was a private equity and wealth manager

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DAILY UPDATE: Stocks, Commodities & Crypto-Currency

Posted on June 11, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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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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🟢 What’s up

Tesla climbed another 5.67% on signs that Elon Musk and President Trump are mending fences and on hype around the robotaxi reveal this week.
TSMC rose 2.63% after the semiconductor company reported that its revenue in the month of May rose 39.6% year over year.
Disney rose 2.65% higher a day after agreeing to purchase Comcast’s stake in streaming service Hulu for $438.7 million. Comcast climbed 2.95%.
Solar stocks got a bit of hope after the Wall Street Journal reported that tech companies are lobbying Congress to keep clean energy subsidies in the tax and spending bill. SolarEdge rose 11.81%, and Sunrun gained 7.13%.
Insmed exploded 28.65% thanks to strong results for the biopharma company’s new treatment for pulmonary arterial hypertension.
Casey’s General Store rose 11.59% after the retailer crushed Wall Street’s profit expectations last quarter and raised its dividend.

What’s down

J.M. Smucker tumbled 15.59% on mixed earnings results and a weaker-than-expected fiscal forecast for the snack foods company.
McDonald’s lost 1.43% thanks to a double downgrade from Redburn Atlantic analysts, who think the fast food titan’s slowing foot traffic and headwinds from obesity drugs will hurt its growth. That’s the company’s third downgrade in three days.
Snap fell just 0.12% after the social media company unveiled its new augmented reality glasses.
Calavo Growers plunged 16.26% after the avocado distributor reported much worse quarterly results than Wall Street was expecting.
Biopharma stocks Liquidia and United Therapeutics lost 16.87% and 14.32%, respectively, on competitor Insmed’s good news.

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Stocks: Markets meandered higher as investors awaited news from ongoing US & China trade negotiations in London. Commerce Secretary Howard Lutnick said talks were going well and could continue into tomorrow.
Commodities: Oil soared to its highest price since April on hopes that a trade deal between the world’s largest economies could spur demand, but plunged back to earth after the US said oil output will fall next year.
Crypto: After just barely holding on last week, Bitcoin has now stayed above $100,000 for 30 days straight for the first time ever—a signal to traders that there’s a new level of support for the crypto king.

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DAILY UPDATE: AHA as Stocks End Slightly Mixed

Posted on June 10, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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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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Stat: $18 billion. One report says that’s how much hospitals and health systems spent combating workplace violence in 2023. (the American Hospital Association)

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🟢 What’s up

The trading platform eToro rose 10.58% and touched a record high after analysts began coverage of the stock. They generally had nice things to say.
Aviation startups like Archer (+10.50%), Joby (+13.67%), Vertical Aerospace (+15.24%), and Blade Air Mobility (+11.58%) all popped after President Trump signed an executive order on Friday intended to spur drone manufacturing.
Stablecoin issuer Circle can’t stop won’t stop after its IPO last week, popping another 7.24% for its third straight day of gains.
Topgolf Callaway jumped nearly 15% after a board member bought ~$2.5 million worth of shares last week. Just in time for the US Open.

What’s down

Robinhood (-1.98%) and AppLovin (-8.21%) fell after S&P Dow Jones Indices decided not to include them—or anyone else—in the S&P 500 index.
Intuitive Surgical sank 5.55% after getting its first “sell” rating on the Street from Deutsche Bank analyst Imron Zafar, who argued that the medtech company is going to face some cutthroat competition over the next few years.
EchoStar, a satellite and wireless company, dropped 8.52% after the WSJ reported it was considering filing for chapter 11 bankruptcy.
The Children’s Place tumbled 32.22% after a rough earnings report for the kids’ clothing store: It posted a quarterly loss nearly 3x projections and revenue decreased 10% year over year.

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HEDGE FUNDS: Defined for Doctors

Posted on June 8, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Dr. David Edward Marcinko MBA MEd CMP™

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WHAT IS A HEDGE FUND?

SPONSOR: http://www.MarcinkoAssociates.com

Many doctors are surprised to learn of an alternative investment known as a hedge fund, pooled investment vehicle or private investment fund. Unlike mutual funds, they can be structured in many ways. However, these funds cannot be marketed or advertised, but they are far from illegal or illicit.

In fact, physicians were among the early investors in one the most successful hedge funds. Warren Buffett got his start in 1957 running the Buffett Partnership, a hedge fund not open to the public. His first appearance as a money manager was before a group of physicians in Omaha, Nebraska. Eleven decided to invest some money with him. A few then followed into Berkshire Hathaway Inc, now among the most highly valued companies in the world.

And, more recently, Scion Asset Management® LLC, is a private investment firm founded and led by my eloquent colleague Michael J. Burry, MD and featured in the movie, The Big Short. Other hedge fund mangers of note include: George Soros, Carl Icahn, Ken Griffin, David Tepper, John Paulson and Bill Ackman.

MASTER FEEDER FUND: https://medicalexecutivepost.com/2025/05/27/master-feeder-structure-hedge-funds/

Definition

A hedge fund is a limited partnership of private investors whose money is managed by professional fund managers who use a wide range of strategies; including leveraging [debt] or trading of non-traditional assets [real-estate, collectible, commodities, cyrpto-currency, etc] to earn above-average returns. Hedge funds are considered a risky alternative investment and usually require a high minimum investment or net worth. This person is known as an “accredited investor” or “Regulation D” investor by the US Securities Exchange Commission and must have the following attributes:

A net worth, combined with spouse, of over $1 million, not including primary residence
An income of over $200,000 individually, or $300,000 with a spouse, in each of the past two years

MANAGERS: https://medicalexecutivepost.com/2025/05/23/hedge-fund-hiring-separate-managers/

TERMS AND FEES

Hurdle Rate

The hurdle rate is part of the fund manager’s performance incentive compensation. Also known as a “benchmark,” it is the amount, expressed in percentage points an investor’s capital must appreciate before it becomes subject to a performance incentive fee. Podiatrists should view the hurdle rate as a form of protection or the fee arrangement.

The hurdle rate benchmarks a single year’s performance and may be considered mutually exclusive of any other year, or the hurdle rate may compound each year. The former case is more common. In the latter case, a portfolio manager failing to attain a hurdle rate in the first year will find the effective hurdle rate considerably higher during the second year.

Once a fund manager attains the hurdle rate, the investor’s capital account may be charged a performance incentive fee only on the performance above and beyond the hurdle rate. Alternatively, the account may be charged a performance fee for the entire level of performance, including the performance required to attain the hurdle rate. Other variations on the use of the hurdle rate exist, and are limited only by the contract signed between the fund manager and the investor. The hurdle rate is not generally a negotiating point, however.

Example: A fund charges a performance fee with a 6 percent hurdle rate, calculated in mutually exclusive manner. A podiatrist places $100,000 with the fund. The first year’s performance is 5 percent. The doctor therefore owes no performance fee during the first year because the portfolio manager did not attain the hurdle rate. During year two, the portfolio manager guides the fund to a 7 percent return. Because the hurdle rate is mutually exclusive of any other year, the portfolio manager has attained the 6 percent hurdle rate and is entitled to a performance fee.

High Water Mark

Some hedge funds feature a “high water mark” provision known as a ”loss-carry forward.” As with the hurdle rate, the high water mark is a form of protection. It is an amount equal to the greatest value of an investor’s capital account, adjusted for contributions and withdrawals. The high water mark ensures that the manager charges a performance incentive fee only on the amount of appreciation over and above the high water mark set at the time the performance fee was last charged. The current trend is for newer funds to feature this high water mark, while older, larger funds may not feature it.

Example: A fund charges a 20 percent performance fee with a high water mark but no hurdle rate. A podiatrist contributes $100,000 to the fund. During the first year, the hedge fund manager grows that capital account to $110,000 and charges a 20 percent performance fee, or $2,000. The ending capital account balance and high water mark is therefore $108,000. During year two, the account falls back to $100,000, but the high water mark remains $108,000. During year three, in order for the manager to charge a performance fee, the manager must grow the capital account to a level above $108,000.

Claw Back Provision

Rarely, a hedge fund may provide investors with a “claw back” provision. This term results in a refund to the investor of all or part of a previously charged performance fee if a certain level of performance is not attained in subsequent years. Such refunds in the face of poor or inadequate performance may not be legal in some states or under certain authorities.

ASSESSMENT

Managers of hedge funds, like colleague Dimitri Sogoloff MBA who is the CEO of Horton Point investment-technology firm, often aim to produce returns that are relatively uncorrelated with market indices and are consistent with investors’ desired level of risk.

While hedging may reduce some risks overall, they cannot all be eliminated. According to a report by the Hennessee Group, hedge funds were approximately one-third less volatile between 1993 and 2010.

HEDGE FUND PENSION PLANS: https://medicalexecutivepost.com/2025/05/18/medical-practice-pension-plan-hedge-fund-difficulties/

CONCLUSION

For a podiatrist who already holds mutual funds and/or individual stocks and bonds, a hedge fund may provide diversification and reduce overall portfolio risk. Consider investing in them with care.

References and Readings:

1. https://www.scionasset.com 

2. Burry, Michael, J: Hedge Funds [Wall Street Personified]. In, Marcinko, DE and Hetico, HR: Comprehensive Financial Planning Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™] Productivity Press, New York, 2017.

3. Marcinko, DE and Hetico, HR: Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™]. Productivity Press, New York, 2015.

4. Marcinko, DE: Dictionary of Health Economics and Finance. Springer Publishing Company, NY 2006

5. https://www.hortonpoint.com/

6. http://hennesseegroup.com

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FINANCIAL ADVISORY FEES: What All Doctors Must Know

Posted on June 8, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

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By Dr. David Edward Marcinko MBA MEd CMP™

WHAT YOU “MUST KNOW“ ABOUT FINANCIAL ADVISORY FEES

Investment fees still matter despite dropping dramatically over the past several decades due to computer automation, algorithms and artificial intelligence, etc. And, they can make a big difference to your financial health. So, before buying any investment, it’s vital to uncover all real financial advisor and stock broker costs.

HEDGE FUND FEES: https://medicalexecutivepost.com/2025/04/18/stocks-basic-definitions/

SIX TYPES OF FEES AND EXPENSES

1. Up-front salesperson commissions. It is easy to ask; “If I buy this investment today and want to get out tomorrow, how much money do I get back?” If the answer is not “all your money,” the difference is probably upfront fees and commissions. These fees may run as high as 30% of the money invested. If you were to earn 5% a year on the investment, it would take 8 years just to break even.

2. Ongoing advisory fees. These are monthly, quarterly, or annual fees paid to advisors for their investment advice and oversight. This includes working with you to pick the asset classes, set diversification, select a portfolio manager, optimize taxes, re-balance holdings and other periodic tasks.

These fees have many names including wrap fee or investment advisory fees. The normal “rule of thumb” is 1% of assets managed, although fees can range from 0 to 7%. Today, it can even be as low as .5%. It can be charged even if the advisor receives an upfront commission. It can be easy to see, or hidden in the fine print.

3. Additional service fees. Find out specifically what services are included financial advisory fees. Additional fees for financial planning or other services are rarely disclosed. They can range from minimal hand-holding focused on your investments to comprehensive financial planning.

4. Ongoing managerial expense ratio fees. These are incredibly well hidden that you may not see them in your statements or invoices. The only way to know is to read the prospectus or other third party analysis, like Morningstar.com. And, they can vary greatly for the same investment, depending on the class of share you buy.

For example, American Fund’s New Perspective Fund’s expense ratio ranges from 0.45% to 1.54%. The average expense ratio of a mutual fund that invests in stocks is 1.35%. Conversely, the average expense ratio of a Vanguard S&P 500 Fund is 0.10%. The difference of 1.25% is staggering over time.

5. Miscellaneous fees. Some advisors charge $50 – $100 a year per account to open or close an account, and even fees to dollar cost average your funds into the market.

6. Transaction fees. Every time you buy or sell a fund, a fee is typically paid to a custodian. These can range from $5 to hundreds of dollars per transaction.

7. Fee Only: Paid directly by clients for their services and can’t receive other sources of compensation, such as payments from fund providers. Act as a fiduciary, meaning they are obligated to put their clients’ interests first

8. Fee Based: Paid by clients but also via other sources, such as commissions from financial products that clients purchase. Brokers and dealers (or registered representatives) are simply required to sell products that are “suitable” for their clients.

A “suitable” investment is defined by FINRA as one that fits the level of risk that an investor is willing and able, as measured by personal financial circumstances, to take on. The Financial Industry Regulatory Authority is a private American corporation that acts as a Self Regulatory Organization (SRO) that regulates member stock brokerage firms and exchange markets. These criteria must be met. It is not enough to state that an investor has a risk-friendly investment profile. In addition, they must be in a financial position to take certain chances with their money. It is also necessary for them to

A net worth, combined with spouse, of over $1 million, not including primary residence
An income of over $200,000 individually, or $300,000 with a spouse, in each of the past two years

Not a fiduciary.

A Review of Investing Expenses

Ways to minimize fees

Choose the fee structure. The fee structure should align with your needs. Consider the type of advice you seek, the number of times needed and the complexity of your financial situation. You can always negotiating tactics are free to ask for a better deal.

Compare fees. It is essential to research and compare different fees. Be sure to read the fine print for details or costs that are not a base fee.

Robo-advisors: For simple investment goals, with little specificity, robo-advisors may be a cost-effective option. They charge lower fees than conventional financial advisors and provide an automated, algorithmic approach to managing your investments.

Assessment

The average cost of working with a human financial advisor in 2024 was 0.5% to 2.0% of assets managed, $200 to $400 per hourly consultation, a flat fee of $1,000 to $3,000 for a one-time service, and/or a 3% to 6% commission fee on the product types sold.

ADVISORY FEES: https://medicalexecutivepost.com/2025/02/26/be-aware-financial-advisory-fees-fee-based-versus-fee-only/

Conclusion

When ruminating over financial advisory fees; read and understand the contract with disclosures, do not sign a confidentiality or non-disclosure agreement, and do not waive your right to a lawsuit. According to colleague Dr. Charles F. Fenton IIII JD, forced legal settlements almost always favor the advisor over the client.

References and Readings:

1. https://www.capitalgroup.com [American Funds]

2. Marcinko, DE and Hetico, HR; Comprehensive Financial Planning Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™] Productivity Press, New York, 2017.

3. Marcinko, DE: Dictionary of Health Economics and Finance. Springer Publishing Company, NY 2006

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INVESTING: Stocks, Bonds & Oil Updates

Posted on June 7, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

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Stocks: The S&P 500 touched 6,000 points for the first time since February and wrapped up its fifth positive week in the past seven following a better-than-expected jobs report. The vibes got even better in the afternoon following a President Trump announcement that the US and China trade teams will meet in London on Monday. STOCKS: https://medicalexecutivepost.com/2025/04/18/stocks-basic-definitions/
Bonds: Treasury yields ticked up in response to the solid May jobs report, a sign that investors were reducing bets on the scale of rate cuts this year. That’s not what Trump wants to hear: He urged Fed Chair Jerome Powell to slash interest rates by a jumbo-sized full point to pour “rocket fuel” on the economy. REVENUE BONDS: https://medicalexecutivepost.com/2024/12/20/bonds-revenue/
Oil: Oil prices have gone sideways for three straight weeks now, trading within a $4 range around $65/barrel since the middle of May. We’ll let you know when something interesting happens. CRUDE OIL: https://medicalexecutivepost.com/2024/08/14/wti-crude-oil/

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REVERSAL OF FORTUNE: For E.S.G. Investors?

Posted on June 5, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

Environmental, Social and Governance Investing

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An Informed Op-Ed Piece

By Dr. David Edward Marcinko; MBA MEd

As many medical, dental and podiatric colleagues are aware, Environmental, Social and Governance (ESG) investing refers to a set of standards for a company’s behavior used by socially conscious investors to screen potential investments. Over the last decade, or so, I have seen many investors pursing this laudable aim.

Yet, more than 80% of private equity fund managers have now stepped away from at least one deal due to ESG concerns, according to the 2023 BDO Private Capital Survey. The reasons are complex, and point towards fund managers’ sentiment towards risk-reward in the current economic environment.

This retreat from ESG is due to backlash from conservatives who are critical of the idea that mutual fund managers should be considering any other factor but a company’s share holders in their investment decisions. Accusations of “Greenwashing” have also plagued many ESG funds, which is when an asset management firm charging higher fees or a specific thematic fund without actually delivering a unique investment strategic competitive advantage.

Greenwashing is the process of conveying a false impression or misleading information about how a company’s products are environmentally sound. Greenwashing involves making an unsubstantiated claim to deceive consumers and / or investors into believing that a company’s products are environmentally friendly or have a greater positive environmental impact than they actually do. Greenwashing may also occur when a company attempts to emphasize sustainable aspects of a product to overshadow the company’s involvement in environmentally damaging practices.

ESG: https://medicalexecutivepost.com/2023/09/23/mas-and-esg-profit/

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According to internationally known linguistics and cognitive science Professor, Mackenzie Hope Marcinko PhD of the University of Delaware, greenwashing is performed through the use of environmental imagery, misleading labels, cognitive biases and tendencies hiding tradeoffs. Greenwashing is also a play on the term “Whitewashing,” which means using false information to intentionally hide wrongdoing, errors or an unpleasant situation in an attempt to make it seem less bad than it really is.

To be sure, uncertainty around ESG regulations in the USA is leading financial deal makers to tread carefully. For example, Jim Clayton MBA, a private equity advisor also from the University of Delaware recently stated:

“We’re a year past when the SEC said they were going to issue ESG reporting standards for public filers which has created more noise in the system.”

“People are nervous about what I would call ESG-intense exposed industries, in other words, those with “heavy carbon footprints”.

MORE ESG: https://medicalexecutivepost.com/2023/03/27/on-socially-responsible-investing-2/

And, a federal judge in Texas said that American Airlines violated federal law by basing investment decisions for its employee retirement plan on environmental, social, and other non-financial factors. The ruling in January 2025 by US District Judge Reed O’Connor appeared to be the first of its kind amid growing backlash by conservatives to an uptick in socially-conscious investing. O’Connor said American had breached its legal duty to make investment decisions based solely on the financial interests of 401(k) plan beneficiaries by allowing BlackRock, its asset manager and a major shareholder, to focus on environmental, social and corporate governance (ESG) factors.

Even the State of Florida pulled $2 billion from the investment management firm BlackRock in the largest divestment ever made. Florida Governor Ron DeSantis claimed that by taking ESG standards into account when making investment decisions, the firm isn’t prioritizing the financial bottom line for Floridians.

Assessment

But, for a few years at least, things were indeed good. In 2020 and 2021, ESG funds outperformed the market by ~4.3%.

Conclusion

So, always remember [caveat emptor]: let the buyer beware!

References and Readings:

1. 2023 BDO Private Capital Survey: https://insights.bdo.com/2023-BDO-Private-Capital-Survey.html

2. Marcinko, DE; Comprehensive Financial Planning Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™] Productivity Press, New York, 2017

3. Marcinko, DE: Dictionary of Health Economics and Finance. Springer Publishing Company, NY 2006.

4. Zymeri, Jeff: ‘Not Going to Fly Here’ [DeSantis Signs Far-Reaching Anti-ESG Bill into Law]. 2023: https://www.yahoo.com/news/not-going-fly-desantis-signs-121648679.html

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DAILY UPDATE: The Gap is Down but Stock Markets are Up

Posted on June 3, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

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🟢 What’s up

Meta Platforms popped 3.62% on a report in the Wall Street Journal that the company is going all-in on using AI to create advertisements.
Applied Digital skyrocketed 48.46% after the data center operator announced two 15-year leases with CoreWeave that will bring in $7 billion in new revenue. CoreWeave rose 7.99%.
BioNTech soared 18.05% on news of a multibillion-dollar collaboration with Bristol Myers Squibb to develop cancer treatments. Bristol Myers Squibb rose 1.06%.
Moderna gained 1.84% thanks to the FDA’s approval of its new Covid vaccine, though it’s only for certain patients.
Blueprint Medicines exploded 26.09% after the biopharma company agreed to be acquired by Sanofi for $9.5 billion.

What’s down

Tesla slipped 1.09% after vehicle deliveries across Europe continued to drop, including a 67% decline in France last month.
Auto stocks suffered from fears of higher pricing thanks to President Trump’s steel tariff hike. General Motors tumbled 3.87%, Ford fell 3.86%, and Stellantis slid 3.55%.
Sports-betting stocks took a loss after Illinois lawmakers decided to tax the companies $0.25 per wager made on their apps. DraftKings lost 5.99%, and Flutter Entertainment dropped 2.74%.
Advertising stocks sank on Meta Platforms’ announcement of AI advances in its advertisements. Omnicom Group lost 4.02%, and WPP Group fell 2.45%.

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Markets: Stocks closed out a winning month Friday with the S&P 500 having its best one since 2023. But the markets are still rattled by the trade war, and stocks wavered during the day after President Trump accused China of breaching its recent trade deal with the US. Investors declined to fall into the Gap after the retail chain said tariffs would cost it up to $150 million this fiscal year.

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Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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DIVIDEND STOCK ARISTOCRATS: Pros and Cons

Posted on June 2, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

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According to wikipedia, the S&P 500 Dividend Aristocrats is a stock market index composed of the companies in the S&P 500 index that have increased their dividends in each of the past 25 consecutive years. It was launched in May 2005.

There are other indexes of dividend aristocrats that vary with respect to market cap and minimum duration of consecutive yearly dividend increases. Components are added when they reach the 25-year threshold and are removed when they fail to increase their dividend during a calendar year or are removed from the S&P 500. However, a study found that the stock performance of companies improves after they are removed from the index The index has been recommended as an alternative to bonds for investors looking to generate income.

To invest in the index, there are several exchange traded funds (ETFs), which seek to replicate the performance of the index.

STOCK DIVIDENDS: https://medicalexecutivepost.com/2025/03/02/stock-dividends-company-earnings-distribution/

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And so, to clarify, the following are the advantages and disadvantages of US dividend aristocrats:

Advantages

They certainly display consistent, blue-chirp corporations with an extended history of vital funds and dividend increments.
Additionally, these stocks offer fixed revenue growth.
In other words, they tend to possess lower price volatility.
Please note that dividend investing supporters prefer a credible income source.
They are sufficiently stable for continuous annual dividend increments across decades, certainly even through recessions.
Above all, it helps quicker portfolio building through reinvestment in these stocks.
They certainly ensure successful long-term investing.
Regarded as among the most famous investment strategies, they relish extensive consumer confidence.

Disadvantages

To clarify, they are considered taxable earnings.
In other words, they offer a lack of control over their distribution timing.
Above all, these shares have under performed S&P 500.
Company development certainly consumes a lot of time.
Additionally, they are subject to market fluctuations.
Moreover, they are considered unimaginative.

STOCK: https://medicalexecutivepost.com/2024/08/20/preferred-versus-common-stock/

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DAILY UPDATE: Home Prices and 23andMe as Stock Markets Wobble

Posted on May 31, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

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The median home price jumped 1.6% YoY last month and is sitting at $431,931. Meanwhile, mortgage rates for a 30-year fixed loan (the most common) are still hovering just under 7%. The chief economist of the National Association of Realtors said lower mortgage rates are the key to getting buyers to buy homes again.

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What’s up

Ulta Beauty is sitting pretty, up 11.78% after the cosmetics retailer crushed earnings expectations and raised its fiscal guidance for the year ahead.
Costco Wholesale rose 3.12% after beating Wall Street’s earnings expectations, though same-store sales did slip a bit.
Zscaler climbed 9.79% on strong earnings for the cybersecurity company, including 23% revenue growth.
Palantir popped 7.73% on a report from the New York Times that the Trump administration has asked the company to help the government compile data on US citizens.

What’s down

Nvidia slipped 2.92% as rhetoric between the US and China over semiconductor import restrictions reignited investor fears.
Gap plunged 20.18% after the retailer revealed that tariffs will cost between $100 and $150 million.
Marvell Technology fell 5.55% after the chip maker barely beat Wall Street expectations last quarter, failing to impress shareholders.
Regeneron Pharmaceuticals tumbled 19.01% thanks to mixed results for its new respiratory drug in late stage trials. The medication is made in partnership with Sanofi, which also dropped 5.61%.
Dell Technologies sank 2.08% after missing earnings expectations last quarter, though it did manage to beat on revenue.
Elastic NV beat analyst forecasts last quarter, but still fell 12.09% after the software company issued lower-than-expected revenue guidance.
PagerDuty, which is in fact a cloud computing company and not a seller of 1990s tech, lost 11.43% after issuing lower second-quarter guidance than Wall Street forecast.

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23andMe peaked at a $6 billion valuation in 2021 but never made a profit. It filed for bankruptcy on March 23rd and was put up for auction.

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FINANCIAL LIFE PLANNING? For Physicians and Medical Professionals

Posted on May 29, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

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By Dr. David Edward Marcinko; MBA MEd CMP™

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Life planning and behavioral finance as proposed for physicians and integrated by the Institute of Medical Business Advisors Inc., is unique in that it emanates from a holistic union of personal financial planning, human physiology and medical practice management, solely for the healthcare space. Unlike pure life planning, pure financial planning, or pure management theory, it is both a quantitative and qualitative “hard and soft” science, with an ambitious economic, psychological and managerial niche value proposition never before proposed and codified, while still representing an evolving philosophy. Its’ first-mover practitioners are called Certified Medical Planners™.

Life planning, in general, has many detractors and defenders. Formally, it has been defined by Mitch Anthony, Gene R. Lawrence, AAMS, CFP^© and Roy T. Diliberto, ChFC, CFP^©of the Financial Life Institute, in the following trinitarian way.

Financial Life Planning is an approach to financial planning that places the history, transitions, goals, and principles of the client at the center of the planning process. For the financial advisor or planner, the life of the client becomes the axis around which financial planning develops and evolves.

Financial Life Planning is about coming to the right answers by asking the right questions. This involves broadening the conversation beyond investment selection and asset management to exploring life issues as they relate to money.

Financial Life Planning is a process that helps advisors move their practice from financial transaction thinking, to life transition thinking. The first step is aimed to help clients “see” the connection between their financial lives and the challenges and opportunities inherent in each life transition.

But, for informed physicians, life planning’s quasi-professional and informal approach to the largely isolate disciplines of financial planning and medical practice management is inadequate. Today’s practice environment is incredibly complex, as compressed economic stress from HMOs managed care, financial insecurity from insurance companies, ACOs and VBC, Washington DC and Wall Street; liability fears from attorneys, criminal scrutiny from government agencies, and IT mischief from malicious electronic medical record [eMR] hackers. And economic bench marking from hospital employers; lost confidence from patients; and the Patient Protection and Affordable Care Act [PP-ACA] more than a decade ago. All promote “burnout” and converge to inspire a robust new financial planning approach for physicians and most all medical professionals.

The iMBA Inc., approach to financial planning, as championed by the Certified Medical Planner™ professional certification designation program, integrates the traditional concepts of financial life planning, with the increasing complex business concepts of medical practice management. The former topics are presented in this textbook, the later in our recent companion text: The Business of Medical Practice [Transformational Health 2.0 Skills for Doctors].

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For example, views of medical practice, personal lifestyle, investing and retirement, both what they are and how they may look in the future, are rapidly changing as the retail mentality of medicine is replaced with a wholesale and governmental philosophy. Or, how views on maximizing current practice income might be more profitably sacrificed for the potential of greater wealth upon eventual practice sale and disposition.

Or, how the ultimate fear represented by Yale University economist Robert J. Shiller, in The New Financial Order: Risk in the 21st Century, warns that the risk for choosing the wrong profession or specialty, might render physicians obsolete by technological changes, managed care systems or fiscally unsound demographics. OR, if a medical degree is even needed for future physicians?

Say, what medical license?

Dr. Shirley Svorny, chair of the economics department at California State University, Northridge, holds a PhD in economics from UCLA. She is an expert on the regulation of health care professionals who participated in health policy summits organized by Cato and the Texas Public Policy Foundation. She argues that medical licensure not only fails to protect patients from incompetent physicians, but, by raising barriers to entry, makes health care more expensive and less accessible. Institutional oversight and a sophisticated network of private accrediting and certification organizations, all motivated by the need to protect reputations and avoid legal liability, offer whatever consumer protections exist today.

Yet, the opportunity to revise the future at any age through personal re-engineering, exists for all of us, and allows a joint exploration of the meaning and purpose in life. To allow this deeper and more realistic approach, the informed transformation advisor and the doctor client, must build relationships based on trust, greater self-knowledge and true medical business management and personal financial planning acumen.

[A] The iMBA Philosophy

As you read this ME-P website, we hope you will embrace the opportunity to receive the focused and best thinking of some very smart people. Hopefully, along the way you will self-saturate with concrete information that proves valuable in your own medical practice and personal money journey. Maybe, you will even learn something that is so valuable and so powerful, that future reflection will reveal it to be of critical importance to your life. The contributing authors certainly hope so.

At the Institute of Medical Business Advisors, and thru the Certified Medical Planner™ program, we suggest that such an epiphany can be realized only if you have extraordinary clarity regarding your personal, economic and [financial advisory or medical] practice goals, your money, and your relationship with it. Money is, after only, no more or less than what we make of it.

Ultimately, your relationship with it, and to others, is the most important component of how well it will serve you.

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DAILY UPDATE: Gold Down as Stock Markets Sky Rocket

Posted on May 28, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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Bonds breathed a sigh of relief after 30-year Treasury yields fell back below 5% as Japanese central bankers took precautionary measures to shore up their finances.

Gold tumbled as investors continue to throw money at risk assets, while bitcoin maintained its recent gains.

CITE: https://tinyurl.com/2h47urt5

What’s up

Informatica popped 6.08% after Salesforce acquired the cloud data manager for $8 billion.
US Steel gained 1.98% on reports that its acquisition by Nippon Steel is finally happening.
Oklo rose 10.29% thanks to the Trump seal of approval for nuclear energy.
CoreWeave can’t stop, won’t stop: The AI hyperscaler was downgraded by Barclays analysts, who think its near-term upside is limited, but shares still rose 20.66%.
VF Corp., the parent company of The North Face, JanSport, etc, rose 12.92% after disclosing that members of its C-suite splurged on the stock.
Soundhound AI is a retail trader favorite, and now Piper Sandler analysts like it,too: The AI voice platform jumped 16.05% on an upgrade.
Southwest gained 5.53% on reports that the airline is rolling out $35 baggage fees beginning tomorrow.
Movie theater stocks popped on a record-breaking Memorial Day weekend at the box office: AMC soared 23.77%, Cinemark climbed 3.82%, and Marcus Corp. gained 10.12%.

What’s down

PDD Holdings plunged 13.64% after the Chinese e-commerce retailer reported a hefty 47% decline in profits last quarter.
Trump Media & Technology Group tumbled 10.38% after the company announced it’s raising $2.5 billion to buy bitcoin.
Champion Homes sank 16.39% after the homebuilder missed Wall Street expectations last quarter by a mile.
Rocket Pharmaceuticals dropped 62.84% after the biotech reported that a patient participating in a gene therapy trial died over the weekend.

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Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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PHYSICIANS: Personal Portfolio Management?

Posted on May 27, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

BY DR. DAVID EDWARD MARCINKO; MBA MEd CMP®

SPONSOR: http://www.CertifiedMedicalPlanner.org

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Most individual physician portfolios are simply a list of stocks. Doctors with such lists usually know the cost of each position and when they acquired it. It is not unusual to find inherited low cost stocks in the account that have been held for many years.

When you inherit securities, a new cost basis is established (the price of the stock on the date of death or six months later—the executor of the estate makes this determination). Even though there would be no capital gain liability if the stock were sold immediately after date of death, most people simply don’t do anything, just hold the stock. Of course taxes should be considered when selling securities but the investment merit should be the overriding factor.

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Doctor and Accountant Opinions

In a personal communication, Mr. L. Eddie Dutton, CPA said, “First make an investment decision and if it fits into the tax plan, so much the better. Doctors often wonder where they will get the money to pay the taxes. I say to get it from the sale of the appreciated stock and cry all the way to the bank with your profit.”

Dr. Ernest Duty MD, a very successful private investor advises “Ask yourself this question: If you had the money instead of the stock, would you buy the stock? If your answer is ‘Yes’ then, hold on to the stock but if you say ‘No, I wouldn’t buy that stock today’ then, sell it” [personal communication].

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HEDGE FUND: Hiring Separate Managers?

Posted on May 23, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

SPONSOR: http://www.CertifiedMedicalPlanner.org

By Staff Reporters

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A hedge fund is a limited partnership of private investors whose money is pooled and managed by professional fund managers. These managers use a wide range of strategies, including leverage (borrowed money) and the trading of nontraditional assets, to earn above-average investment returns. A hedge fund investment is often considered a risky, alternative investment choice and usually requires a high minimum investment or net worth. Hedge funds typically target wealthy investors.

Growing Funds: https://medicalexecutivepost.com/2025/01/15/hedge-funds-a-growing-sector-of-investing/

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I want to invest with a manager that has the skills to “hedge” a portfolio, but I do not wish to mix my money with other investors as in a hedge fund.

QUESTION: Can I hire hedge fund managers to manage my account separately?

Some hedge fund managers do take the time to recruit and manage separate accounts, with or without the help of referring brokers.

However, before long the administrative burden of managing so many separate accounts can become quite significant. Hence, the minimums for such separate accounts are generally much higher than if one were to invest in the manager’s hedge fund.

Hedge Fees: https://medicalexecutivepost.com/2024/07/09/hedge-funds-understanding-fees-and-costs/

The best feature of these separate accounts is that potentially every aspect of the investment account, including fees, is negotiable. Other features include greater transparency and increased liquidity, since separately managed accounts can often be shut down on short notice.

Hedge Monitors: https://medicalexecutivepost.com/2024/07/09/how-to-monitor-hedge-funds/

Investors must be aware, however, that for practical purposes the portfolio manager generally will buy and sell the same securities in the separately managed accounts that the portfolio manager buys and sells in the hedge fund, yet the expenses incurred by the investor will likely be higher.

Hedge IRA: https://medicalexecutivepost.com/2025/04/02/hedge-funds-in-individual-retirement-accounts/

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DAILY UPDATE: Stocks End Day Mixed

Posted on May 23, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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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 wavered throughout the day as the 10-year Treasury yield rose back above 4.5%, making a convincing argument for investors to buy risk-free bonds with big yields rather than equities.
Yields on both 20-year and 30-year Treasuries traded above 5% after the Republican tax and spending bill passed the House, raising fears of a bigger US deficit and lower creditworthiness in the years ahead.
Bitcoin continued to climb last night, hitting a new record high of $111,886.41 in the wee hours of the morning before losing some ground throughout the trading session today.

CITE: https://tinyurl.com/2h47urt5

What’s up

Nike gained 2.30% on the news that it will begin selling its shoes on Amazon for the first time since 2019.
Fannie Mae popped 46.73% and Freddie Mac jumped 42.50% on President Trump’s comments that he’s seriously considering bringing the mortgage giants public.
Advance Auto Parts exploded 57.14% higher after better-than-feared earnings made it clear that its turnaround plan is working.
Urban Outfitters soared 22.84% after reporting EPS of $1.16 last quarter, far better than the $0.84 per share analysts had forecast.
Snowflake gained 13.47% thanks to a strong first quarter and management’s expectation that revenue will rise about 25% this quarter.

What’s down

Walmart lost 0.48% on the news that it will cut 1,500 jobs in a corporate restructuring.
Analog Devices fell 4.63% even though the semiconductor maker beat Wall Street estimates on both sales and profits last quarter.
Health insurance stocks took a hit on reports that the US government will conduct “aggressive” Medicare Advantage audits. Humana sank 7.58%, UnitedHealth Group fell 2.08%, and CVS Health dropped 3.06%.

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Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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DAILY UPDATE: Stock Markets Collapse!

Posted on May 22, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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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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A Partner of the Institute of Medical Business Advisors , Inc.

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While stocks usually steal headlines, all eyes were on the bond market today. The 10-year bond yield popped back above 4.5% first thing this morning while the 30-year rose above 5% as fears of larger deficits due to the Republican tax and spending bill gave investors pause. A poorly received auction of $16 billion in 20-year bonds this afternoon only pushed yields higher.
Bitcoin climbed to a new all-time high early in the trading session, touching $109,500 at one point today as investors continue to search for alternatives to bonds and the US dollar.
Crude oil climbed to its highest price in a month on reports of flaring tensions between Israel and Iran, then tumbled lower after the US announced surprisingly high oil inventories.

CITE: https://tinyurl.com/2h47urt5

What’s up

Silly goose: Outdoor apparel maker Canada Goose soared 19.35% after reporting a stellar first quarter.
Alphabet rose 2.79% following a slew of big announcements at its developer conference, including a revamped AI Search.
Xpeng popped 13.06% thanks to a smaller-than-expected loss last quarter for the Chinese EV maker.
WeRide soared 21.42% on the announcement that the robotaxi will buy back $100 million of its stock.

What’s down

UnitedHealth Group secretly paid nursing homes to transfer fewer people to hospitals so it could cut costs, according to The Guardian. Shares understandably tumbled 5.79%.
Target missed the mark last quarter, with fewer transactions thanks to DEI boycotts leading to lower sales and profits, pushing shares down 5.21%.
Lowe’s sank 1.77% despite sticking to its full-year guidance, noting that sales to professionals will pad its bottom line.
Palo Alto Network may have beaten analysts’ estimates for sales and profits, but the cybersecurity company still fell 6.80% due to thinner margins.
Take-Two Interactive sank 4.52% after the video game maker put $1 billion in common stock on the market.
Fair Isaac caught strays today from a Trump Administration official who was displeased by the credit analytics company’s decision to raise royalty fees.
Carter’s crashed 15.74% on the announcement that the children’s clothing retailer will slash its dividend due to higher costs from tariffs.
Airline stocks tumbled after the FAA limited flights in and out of Newark Airport. United Airlines fell 3.93%, Southwest Airlines lost 2.35%, and American Airlines sank 3.52%.
Wolfspeed, easily the best-named stock on the market, may go bankrupt. Shares of the semiconductor supplier dropped 59.11%.

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Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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DAILY UPDATE: UnitedHealth Group Alert as Stocks End Slightly Mixed

Posted on May 16, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants

“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“

A Partner of the Institute of Medical Business Advisors , Inc.

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SPONSORED BY: Marcinko & Associates, Inc.

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The Justice Department is investigating UnitedHealth Group for possible criminal Medicare fraud, the WSJ reported. The healthcare-fraud unit of the Justice Department’s criminal division is overseeing the investigation and it has been an active probe since at least last summer. Apparently the federal investigation is focusing on the company’s Medicare Advantage business practices. UnitedHealth said in a statement it hadn’t been notified by the Justice Department of the criminal investigation. The statement said the company stands “by the integrity of the Medicare Advantage program.”

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🟢 What’s up

Foot Locker exploded 85.70% on the news that Dick’s Sporting Goods will acquire the footwear retailer for $2.4 billion. Dick’s shares sank 14.58%.
Speaking of shoes, Boot Barn soared 16.66% thanks to the Western footwear seller’s record revenue last quarter.
And in more shoe news, Birkenstock gained 5.89% after the purveyor of the world’s ugliest sandals missed revenue estimates but beat on profits.
Under Armour rose 4.47% after the sportswear retailer issued a “meh” earnings report and pulled its fiscal forecast.
Cisco climbed 4.85% after the networking company beat Wall Street analysts’ expectations and also issued better-than-expected fiscal guidance.
Hopefully you botta ’da stock: Ibotta rocketed 20.01% higher on strong earnings for the cash-back app.

What’s down

Apple fell 0.41% on news that President Trump scolded Tim Cook for trying to build iPhones in India.
Meta Platforms dropped 2.35% thanks to a Wall Street Journal report that the social media giant has delayed the debut of its flagship AI model.
UnitedHealth Group plummeted 10.93% on a Wall Street Journal report that the health insurer is being investigated for criminal Medicare fraud.
Ubisoft plunged 13.28% after the video game studio reported a 20.5% decline in net bookings last quarter.
Coinbase crumbled 7.20% on news that hackers bribed employees to steal customer information and that it will take $400 million to fix the mess.
DXC Technology sank 3.26% thanks to shockingly low fiscal guidance from the IT company.
Fiserv’s CFO said that the fintech’s retail payment system will see similar volume next quarter. Shareholders hoping for stronger growth were disappointed and pushed shares down 16.19%.

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DAILY UPDATE: Medicare Advantage [Part C] Down as Stock Markets Blast Off

Posted on May 13, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants

“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“

A Partner of the Institute of Medical Business Advisors , Inc.

http://www.MedicalBusinessAdvisors.com

SPONSORED BY: Marcinko & Associates, Inc.

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During the 2024–25 Annual Enrollment Period, Medicare Advantage drew in only 1.3 million new members, compared to 2+ million in each of the five years prior, according to a March 25 report by consulting firm HealthScape Advisors. Traditional fee-for-service Medicare grew by about 200,000 after years of losing hundreds of thousands of members, according to HealthScape. During the 2023–24 AEP, it lost about 800,000.

CITE: https://tinyurl.com/2h47urt5

🟢 What’s up

Semiconductor stocks that looked like some of the biggest losers of the trade war just last week soared on today’s China/US deal. Nvidia popped 5.44%, TSMC rose 5.93%, AMD climbed 5.13%, Broadcom rose 6.43%, and Qualcomm gained 4.78%.
Magnificent Seven stocks also shot higher, particularly Apple (6.31%) and Amazon (8.07%), two companies that were bearing the brunt of higher tariffs.
Tesla jumped 6.75% on the tariff deal news, given a massive production plant that was responsible for 22% of Tesla’s total revenue last year is located in China.
US-listed Chinese stocks popped, for obvious reasons: JD.com gained 6.47%, Alibaba rose 5.82%, and Baidu climbed 5.08%.
Healthcare company Kindly MD soared 251.03% today after merging with Nakamoto, a bitcoin investment company founded by Trump’s crypto advisor David Bailey.
NRG Energy popped 26.21% after it agreed to acquire a slew of natural gas facilities from LS Power Equity Advisors.
Next Technology Holding soared 38.56% after the software company added 5,000 bitcoin to its portfolio and said it wants to add even more.

What’s down

EchoStar tumbled 16.58% today after the Wall Street Journal reported that the Federal Communications Commission was opening an investigation into the firm’s 5G network.
A slew of metal mining stocks fell today as gold declined on the tariff deal: AngloGold Ashanti fell 10.31%, Wheaton Precious Metals dropped 7.92%, Newmont Corporation lost 5.93%, and Gold Fields Limited sank 10.47%.

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Stocks and Alternative Investments

Posted on May 12, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

SPONSOR: http://www.MarcinkoAssociates.com

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The Dow Jones exploded 1,000 points in pre-market trading, and the rally never waned toay. Both the Dow and the S&P 500 are nearly back to even for the year, while the NASDAQ clawed its way out of bear market territory.

Bonds tumbled while yields soared as the market pushed the timing for the Fed to cut interest rates back from July to September.

Gold sank as traders passed right on by the go-to investment for safety and sprinted straight toward equities.

Crude oil popped on the hopes of stronger economic growth for both the US and China now that the two countries are finally engaging in trade discussions.

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PARADOX: Warren Buffett and Berkshire Hathaway (BRK)

Posted on May 11, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Vitaliy Katsenelson CFA

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I am back from what has become over the past two decades an annual pilgrimage to Omaha.

What’s fascinating about this trip is that it has everything and nothing to do with Warren Buffett. The main event that draws everyone to Omaha – the Berkshire Hathaway (BRK) annual meeting – is actually the least important part. I could have watched the shareholder meeting livestreamed on YouTube from the comfort of my living room couch.

The emergence of the Berkshire phenomenon reminds me of China’s manufacturing evolution. China initially attracted capital because of its cheap labor. But over time, China took this capital and plowed it into infrastructure. Factories were built next to each other, each specializing in certain areas. A specialized ecosystem emerged.

Today, Chinese labor is no longer cheap. It’s been replaced by automation, and now China is a powerhouse for manufacturing anything and everything.

The transformation that the BRK weekend has undergone followed a similar progression. Initially, the only way to absorb Buffett and Munger’s wisdom was to come to Omaha, as the event was not streamed. But then something interesting happened. The BRK weekend attracted people who shared the same value system, and friendships were formed. A variety of smaller events began to be scheduled throughout the same weekend across Omaha, and an equally specialized ecosystem emerged.

The shareholder meeting began to be streamed about ten years ago, but that has had no impact on attendance. This is one reason why I think Buffett is at peace with the idea of no longer presiding at the meeting – people will still come to Omaha the weekend before Mother’s Day.
The BRK weekend now features dozens of excellent events.

I spoke at several, including an investing panel at Creighton University, alongside the wonderful Bob Robotti, a die-hard value investor who runs Robotti & Co. I’ve known Bob for years – at 72, he exhibits the same enthusiasm for stocks as someone decades younger – and this panel was an excellent example of what the BRK Omaha ecosystem has produced.

Bob and I have very different approaches to value investing. He loves cyclical businesses, while I generally shun them. Bob mentioned that he’d buy a very cheap business run by a mediocre manager, while I would not touch it with a ten-foot pole.

There is absolutely nothing wrong with either approach; indeed, there is an important lesson in it. Your investment philosophy and process have to fit your personality and your EQ. In my case, I get nervous (and thus irrational) when I own companies run by imbeciles who don’t have either skin or soul in the game. But the great thing about the BRK weekend is that I learn from Bob every time I spend time with him. He’s a thoughtful and genuinely kind human being.

From the outside, the BRK weekend may seem like a place where people simply want to learn how to get and stay rich. But this gathering transcends value investing and capitalism and genuinely celebrates human values. People (like me) bring their kids to this event. And just like at the main event, at the Q&A breakfast I hosted for my readers, many questions centered on life rather than investing.

My first Omaha reader meetup fit around a small restaurant table. This year, to my surprise, 450 people packed into a venue with standing-room only. I answered questions on every imaginable topic for just over two hours, and by the end I was exhausted.

This gave me even greater admiration for Buffett, who is four decades my senior, yet still fielded questions for four solid hours. I was delighted to hear Warren give a similar answer to one I had given the day before when asked what advice he’d give to graduating students:
“Don’t worry too much about starting salaries and be very careful who you work for because you will take on the habits of the people around you.”

(Incidentally, we are going to host our next Q&A Breakfast on May 1, 2026. You can sign up for it here. It’s free, but I suggest you sign up early, as it fills up fast.)

I also participated (as I have for over a decade) in an investing panel at YPO (Young President Organization) in the beautiful Holland Performance Art Center with Tom Gaynor, CEO of Markel (often described as a baby Berkshire Hathaway) and Lawrence Cunningham. Lawrence authored perhaps the most important book about Buffett, The Essays of Warren Buffett, masterfully editing Warren’s annual letters into a cohesive volume. This year’s panel was one of those occasions where I found myself listening intently to my fellow panelists instead of speaking more.

Lawrence has met Greg Abel – Buffett’s designated successor – and feels optimistic about him. He’s probably right – this was one of Buffett’s most crucial decisions, which he did not make lightly. Yet I can’t imagine sitting for four hours listening to Greg Abel. I am sure he is a brilliant CEO, but he’s neither Buffett nor Munger – few individuals possess so much worldly wisdom and communicate it with such clarity and humor.

This brings me to the point of this note: the dramatic (yet not unexpected) announcement that Buffett is stepping down as CEO of BRK at the end of the year.

Before I comment on this, let me tell you a story. Imagine you have been watching a soap opera for 17 years. You arrive dutifully every year to watch every episode in person. And then you miss the last five minutes of the explosive finale before it goes off the air. This is what happened to me when Buffett announced his retirement as CEO.

A few minutes before noon, while Buffett was answering a question I’d heard before and appeared to be winding down, I suggested we slip out early for lunch to avoid the crowds. When we came back, I discovered that the meeting had gone on until 1 pm, and just before it ended, Buffett announced that he would step down at the end of the year. Seventeen years of watching Warren speak and I missed the most dramatic moment of all, followed by a five-minute standing ovation.

I think Buffett has engineered his exit brilliantly. He will still remain chairman, and even before the announcement he was not managing BRK’s day-to-day operations. As a collection of hundreds of companies that often have absolutely nothing in common with each other, BRK is already highly decentralized. Buffett’s main contribution has been capital allocation.

Giving up the CEO title while he’s still alive means Buffett has brought in his replacement in an orderly way and created a smooth transition. But I have a feeling that on January 1, 2026, when Greg Abel officially becomes CEO, nothing will really change, and Warren will continue doing what he’s been doing for as long as he can. If Buffett is able – he’ll be 95 – he’ll still drive to the office and stop by McDonald’s for a breakfast sandwich (there’s a lot of wisdom in finding pleasure in little things). His son Howard Buffett will become chairman after Warren, with his only job being to preserve the culture.
I’ve been asked what I think of BRK stock. We bought the stock during the pandemic. It has done better than I expected, in part because of the strong performance of Apple, which was BRK’s largest holding. But BRK today is an unexciting investment at its current price. In all honesty, it is a conglomerate with some good and some merely okay businesses.

As a consumer, I get a (small) glimpse into how BRK businesses are being run by visiting Dairy Queen. BRK owns DQ, and I love their soft-serve ice cream (though I only eat it when I travel). My favorite part of research!

DQ has (or maybe had) a strong brand and operates on a capital-light model as a franchisor. But most stores I have visited looked like they have been neglected and need fresh paint. To be sure, I understand the limitations of this “analysis,” and DQ overall amounts to a rounding error on BRK’s financials. But little things often reveal much about big things.

BRK’s big businesses, from what I can glean through their financials, are not particularly well managed – GEICO and BNSF (railroad) have definitely been undermanaged lately. BNSF is not nearly as efficient as its competitors that embraced precision railroading, and until recently GEICO was losing market share to Progressive.

BRK’s reinsurance business, a significant source of BRK’s profitability, is run by the extraordinary Ajit Jain. Ajit is in his 70s and unfortunately it seems he is not in great health. Is his replacement going to shoot the lights out, like he did? We don’t know. But Ajit is probably more important to BRK today than Buffett.

BRK is not going to melt into oblivion after Buffett is gone, but its best days are behind it. As Buffett has acknowledged, just its size alone makes it very difficult for BRK to grow. Truth be told, even if Buffett were thirty years younger and continued to run BRK, I am not sure the results would be much different than what I think the future holds with Abel at the helm.

Buffett and Charlie Munger had a tremendous impact on me as an investor and human being. I am incredibly thankful to both. I hope Warren is there next year, but, in either case, I will be.

As value investors say, “next year in Omaha”.

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DAILY UPDATE: Strong Labor Department as Stock Markets Soar Last Week but Stock and Oil Futures Drop Early Monday Morning

Posted on May 5, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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U.S. stock futures declined after the S&P 500 notched its longest winning streak in more than 20 years last week. Dow Jones Industrial Average futures were down around 280 points, or 0.7%, as of 11 p.m. Eastern. S&P 500 futures and NASDAQ-100 futures were off about 0.8%.

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The labor market stayed strong. The US added 177,000 jobs in April, while unemployment stayed steady at 4.2%, new Labor Department data shows. That was slightly less job growth than the month before, but still more than expected, and it shows a resilient labor environment even as the president’s introduction of tariffs roiled the stock and bond markets and raised concerns about a recession. President Trump celebrated the news in a Truth Social post that once again urged the Fed to cut interest rates.

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Markets: Stocks soared like a balloon whose string a toddler couldn’t keep hold of yesterday. Unexpectedly strong jobs data for last month and reports that China is open to trade talks helped push the S&P 500 to its longest winning streak in more than 20 years (more on that later), erasing the losses from recent tariff turmoil. On its own impressive streak is Netflix, which hit an all-time high and finished its 11th day in the green for its longest positive run ever.

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Crude oil futures dropped more than 3% Sunday after OPEC+ agreed to accelerate production increases for a second straight month in June by 411K bbl/day.

U.S. WTI crude (CL1:COM) for June delivery recently traded -3.4% at $56.28/bbl and July Brent crude (CO1:COM) -3.2% at $59.34/bbl, with both front-month contracts touching their lowest levels since April 9th.

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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QUANTUM COMPUTING: Healthcare and Banking Affected [B-QTUM Index Fund]

Posted on April 30, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

FUNDAMENTAL INDUSTRY CHANGES

By Staff Reporters

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Index Funds

An index mutual fund or ETF (exchange-traded fund) tracks the performance of a specific market benchmark—or “index,” like the popular S&P 500 Index—as closely as possible. That’s why you may hear people refer to indexing as a “passive” investment strategy.

Instead of hand-selecting which stocks or bonds the fund will hold, the fund’s manager buys all (or a representative sample) of the stocks or bonds in the index it tracks.

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Quantum Computing

Unlike traditional computers that use bits, quantum computers utilize qubits. These qubits are capable of being in a state of superposition, where they can represent both 0 and 1 simultaneously, enabling the processing of multiple calculations at once. This could allow quantum computers to outperform classical computers in solving certain complex problems. However, the field is still overcoming challenges such as qubit stability and decoherence; especially in these three areas:

Quantum computing could fundamentally alter healthcare by accelerating drug discovery and improving individualized medicine. Rapid analysis of enormous volumes of biological data allows quantum computers to find trends that might guide the creation of more potent treatments. In addition to accelerating drug development, this will enable customized treatments tailored to unique genetic profiles.

Faster and more accurate financial models produced by quantum computing will transform the banking sector. Through real-time analysis of intricate financial systems, it can help investors to control risk and make better decisions. More precise market forecasts will help maximize portfolio management and trading strategies.

Through greatly enhanced medical diagnosis and patient care, quantum computing can transform the healthcare industry. Quantum computers can remarkably accurately find trends and possible health hazards by analyzing enormous volumes of medical data in a fraction of the time. Early diagnosis and more customized treatment alternatives follow from this.

B–QTUM Index Fund

Index Description: The BlueStar® Machine Learning and Quantum Computing Index (BQTUM) tracks liquid companies in the global quantum computing and machine learning industries, including products and services related to quantum computing or machine learning, such as the development or use of quantum computers or computing chips, superconducting materials, applications built on quantum computers, embedded artificial intelligence chips, or software specializing in the perception, collection, visualization, or management of big data.

Citation and Disclosure: https://www.defianceetfs.com/qtum/

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ZWEIG BREADTH THRUST: A Stock Indicator

Posted on April 29, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

SPONSOR: http://www.MarcinkoAssociates.com

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The Zweig Breadth Thrust may sound like an extremely difficult yoga position, but it’s actually a bullish technical indicator with an extraordinary record of 100% accuracy that was just triggered.

Created by investment advisor and author Martin Zweig, the indicator takes the 10-day moving average of the number of advancing stocks across the market and divides it by the number of advancing stocks plus the number of declining stocks. When the resulting percentage rises from below 40% to above 61.5% in 10 trading days, it’s a sign that stocks are rapidly going from oversold to overbought.

The math is a bit complicated, but Carson Research’s Chief Market Strategist Ryan Detrick certainly thinks highly of it.

According to the chart that he just posted on X, the Zweig Breadth Thrust has a perfect record of predicting market gains 6 and 12 months after it appears.

With the indicator triggering on Friday, here’s hoping that we can continue to trust the Zweig Thrust.

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FEAR BASED GOLD FEVER: Protect Yourself

Posted on April 27, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Rick Kahler CFP™

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On January 21, 1980, in what I thought was a brilliant financial move, I bought gold. At what was then an all-time high of $873 an ounce.

Fast forward 45 years, and here we are again. Gold is on a tear, priced just over $3,000 an ounce at the time of this writing. It needs to rise another 16% to reach its inflation-adjusted record and many analysts think it might just get there.

What’s driving this gold rally? The same thing that drove it in 1980—fear.

Back then, the U.S. was grappling with rising inflation, double-digit price increases, and interest rates in the high teens. Investors feared that the dollar and stock market would collapse, that their hard-earned savings would erode into oblivion, and that gold was a safe haven. Sound familiar?

Today, inflation is less dramatic and the stock market would have to go a long way down to even register as a bear market, but it’s still a major concern. Central banks are buying gold at record levels. Gold-backed ETFs, which had been seeing years of outflows, are finally pulling investors back in.

For most, gold isn’t just an investment, it’s an emotional hedge against uncertainty. Back in 1980, I wasn’t thinking about long-term strategy. I was reacting to fear. Inflation had hit 14%, and like many others, I was convinced the dollar would soon be worthless. Gold, I thought, was my best shot at preserving wealth.

The problem? Inflation eventually cooled; it had dropped to an average of 3.5% by the mid-1980s. Gold prices tumbled along with it. Investors who, like me, bought at the peak, 45 years later still haven’t broken even on an inflation-adjusted basis. (My $873 purchase price, adjusted for inflation, equates to $3,580 today.) If I had stuck with a well-diversified portfolio, I likely would have fared much better over time.

Over the years, I’ve come to realize that our financial decisions aren’t just about numbers. They’re deeply influenced by our Internal Financial System™, a framework that helps explain why we handle money the way we do. I now see that my decision to buy gold was a battle between different financial “parts” of myself.

One part panicked, convinced that money was about to become worthless. Another saw gold prices soaring and didn’t want to miss out. Yet another part convinced me that buying at the peak was still a smart move. Had I paused and examined these internal voices, I might have made a different decision.

My gold purchase shows why emotionally driven investment decisions rarely lead to great financial outcomes. Instead of asking, “Is gold a smart long-term investment?” I was asking, “How do I make sure I don’t lose everything?” Those are two very different questions.

If you’re thinking about buying gold, I urge you to consider these questions:

“Am I investing from a place of fear or strategy?” If you’re rushing in because you’re scared of inflation, pause and reassess.

“How does gold fit into my broader financial plan?” Gold can be a great hedge—if held in appropriate amounts in a diversified portfolio. It is best viewed as catastrophic financial insurance, rather than an investment.

“Am I reacting to headlines or making a well-thought-out decision?” The financial media loves a good gold rally. But remember, markets move in cycles. Today’s rally may be history repeating itself.

Back in 1980, fear persuaded me that gold was a sure thing. I forgot an essential caveat—there are no sure things in investing. If bad market timing were an Olympic sport, I’d have taken home the gold (pun intended) for least profitable performance.

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ANNUITIES: Three Types of Insurance Products

Posted on April 23, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

SPONSOR: http://www.MarcinkoAssociates.com

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An annuity is a contract between you and an insurance company. When you purchase an annuity, you make a lump-sum contribution or a series of contributions, generally each month. In return, the insurance company makes periodic payments to you beginning immediately or at a pre-determined date in the future. These periodic payments may last for a finite period, such as 20 years, or an indefinite period, such as until both you and your spouse are deceased. Annuities may also include a death benefit that will pay your beneficiary a specified minimum amount, such as the total amount of your contributions.

The growth of earnings in your annuity is typically tax-deferred; this could be beneficial as you may be in a lower tax bracket when you begin taking distributions from the annuity.

Warning: A word of caution: Annuities are intended as long-term investments. If you withdraw your money early from an annuity, you may pay substantial surrender charges to the insurance company as well as tax penalties to the IRS and state.

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There are three basic types of annuities — fixed, indexed, and variable

1. With a fixed annuity, the insurance company agrees to pay you no less than a specified (fixed) rate of interest during the time that your account is growing. The insurance company also agrees that the periodic payments will be a specified (fixed) amount per dollar in your account.

2. With an indexed annuity, your return is based on changes in an index, such as the S&P. Indexed annuity contracts also state that the contract value will be no less than a specified minimum, regardless of index performance.

3. A variable annuity allows you to choose from among a range of different investment options, typically mutual funds. The rate of return and the amount of the periodic payments you eventually receive will vary depending on the performance of the investment options you select.

READ: SEC’s publication, Variable Annuities: What You Should Know.

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Feel free to submit education content to the site as well as links, text posts, images, opinions and videos which are then voted up or down by other members. Comments and dialog are especially welcomed.

Daily posts are organized by subject. ME-P administrators moderate the activity. Moderation may also conducted by community-specific moderators who are unpaid volunteers.

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The DOCTOR EFFECT

Posted on April 21, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

Dr. David Edward Marcinko; MBA MEd CMP™

Medical Colleagues Beware the Advisors

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SPONSOR: http://www.MarcinkoAssociates.com

Several years ago a group of highly trusted and deeply experienced financial advisors, insurance service professionals and estate planners noted that far too many of their mature retiring physician clients, using traditional stock brokers, management consultants and financial advisors, seemed to be less successful than those who went it alone. These Do-it-Yourselfers [DIYs] had setbacks and made mistakes, for sure. But, the ME Inc doctors seemed to learn from their mistakes and did not incur the high management and service fees demanded from general or retail one-size-fits-all “advisors.”

In fact, an informal inverse related relationship was noted, and dubbed the “Doctor Effect.” In others words, the more consultants an individual doctor retained; the less well they did in all disciplines of the financial planning and medical practice management, continuum.

Of course, the reason for this discrepancy eluded many of them as Wall Street brokerages and wire-houses flooded the media with messages, infomercials, print, radio, TV, texts, tweets, dinners and internet ads to the contrary. Rather than self-learn the basics, the prevailing sentiment seemed to purse the holy grail of finding the “perfect financial advisor.” This realization confirmed the industry culture which seemed to be:

Bread for the advisor – Crumbs for the client!

And so, Marcinko Associates formed a cadre’ of technology focused and highly educated multi-degreed doctors, nurses, financial advisors, attorneys, accountants, psychologists and educational visionaries who decided there must be a better way for their healthcare colleagues to receive financial planning advice, products and related advisory services within a culture of fiduciary responsibility.

We trust you agree with this specific niche knowledge, and collegial consulting philosophy, as illustrated thru our firm and these two books.

EDUCATION: Books

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DAILY UPDATE: Red Stocks, United Airlines and the Capital One-Discover Merger

Posted on April 20, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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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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HAPPY EASTER 2025

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Markets: The markets were closed for Good Friday giving investors time to take a breather amid tariff-induced volatility after all three major indexes finished the short trading week in the red.
Stock spotlight: As a sign of just how confusing it is out there, United Airlines stock rose this week after the company released two different forecasts—one for a stable economy and one for a possible US recession.

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A $35 billion merger between Capital One and Discover that would make Capital One the nation’s largest credit card issuer cleared a major regulatory hurdle this week, according to multiple outlets, as the Justice Department told antitrust officials it did not find reasons to block the deal, paving the way for a potentially historic shakeup of the American credit card space.

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Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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STOCKS: Basic Definitions

Posted on April 18, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

SPONSOR: http://www.MarcinkoAssociates.com

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When you buy a share of stock, you are taking ownership in a company. Collectively, the company is owned by all the shareholders, and each share represents a claim on assets and earnings. If the company distributes profits to its shareholders, you should receive a proportionate share of the earnings.

Stocks are often categorized by the size of the company, or their market capitalization. The market capitalization is determined by multiplying the number of outstanding shares by the current share price. The most common market cap classes are small-cap (valued from $100 million to $1 billion), mid-cap ($1 billion to $10 billion), and large cap ($10 billion to $100 billion).

Stocks are also categorized by their sector, or the type of business the company conducts. Common sectors include utilities, consumer staples, energy, communications, financial, health care, transportation, and technology.

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Stocks are often viewed as being in one of two categories — growth or value.

Growth stocks are ones that are associated with high quality, successful companies that are expected to continue growing at a better-than-average rate as compared to the rest of the market.
Value stocks are ones that have generally solid fundamentals, but are currently out of favor with the market. This may be due to the company being relatively new and unproven in the market, or because the company has recently experienced a decline due to the company’s sector being affected negatively. An example of this would be if the federal government was to levy a new tax on all cell phones, thus negatively affecting all cell phone company stocks.

History has shown that, over time, stocks have provided a better return than bonds, real estate, and other savings vehicles. As a result, stocks may be the ideal investment for investors with long-term goals.

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Few Stocks UP with Many Stocks DOWN

Posted on April 18, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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U.S. stock and bond markets will be closed on Good Friday. Many global markets will also be closed Friday. Exceptions include Japan and mainland China, which will be open as usual. U.S. markets will reopen Monday. Many international markets will remain shut to mark Easter Monday, including Australia, Hong Kong, and exchanges in France, Germany and the U.K.

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YESTERDAY 4/17/25

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🟢 What’s up

TSMC eked out a 0.10% gain after the semiconductor maker reported a 60% increase in profits last quarter and downplayed the effects of tariffs.
Charles Schwab isn’t just the guy who made $2 billion from market chaos last week. It’s also the brokerage that reported record quarterly revenue, but shares only rose 0.65%.
Hertz climbed another 43.87%, tacking on another day of big wins after Bill Ackman’s Pershing Square Capital took a stake in the rental car company.
Trump Media & Technology Group popped 11.65% after the company asked the SEC to investigate a hedge fund with a $105 million short bet against it.
Chinese tea chain Chagee soared 15.86% in its first day of trading on the Nasdaq.
DR Horton missed analyst expectations last quarter and lowered its fiscal year guidance, but investors quickly forgave the country’s largest homebuilder and pushed shares up 3.16%.

What’s down

Alphabet took a 1.38% hit after a federal judge ruled that Google is a monopoly. This marks Alphabet’s second antitrust loss since last August.
Alcoa fell 6.98% after the aluminum mining behemoth announced it ate about $20 million in tariff-related costs last quarter, noting that this figure could rise to $90 million in the current quarter.
American Express fell 0.64% even though the credit card company beat Wall Street’s expectations last quarter.
Global Payments tumbled 17.43% after the payment processor announced a $24 billion acquisition of competitor Worldpay.

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Very Few Stocks UP but Many Stocks DOWN

Posted on April 17, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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🟢 What’s up

Hertz Global soared 56.44% on the news that Bill Ackman’s Pershing Square Capital has taken a $46.5 million stake in the rental car company.
Travelers Cos. rose 1.13% in spite of massive losses from California wildfires, which didn’t hurt the insurer’s bottom line as badly as Wall Street feared.
Abbott Laboratories gained 2.77% after the pharma company missed sales estimates but still beat earnings forecasts.
Gold miners continue to climb as gold keeps hitting new highs. Newmont rose 2.51%, while Gold Fields gained 3.35%.

What’s down

Tesla sank 4.94% after the company’s share of EV sales in California fell below 50% in the first quarter, while export controls threaten plans to produce Cybercabs in the US.
United Airlines fell 0.01% despite reporting its “best first-quarter financial results in five years,” according to management. The airline took the unique measure of providing two different financial outlooks for the year ahead: one for a stable economy, and one for a recession.
Lyft shed just 0.46% on the news that the ride-hailing company is acquiring European taxi app Free Now for $199 million.
Interactive Brokers Group reported a 47% increase in trading volume last quarter that helped it beat revenue expectations, but the brokerage still tumbled 8.95% after missing profit forecasts.
Palantir gave up some of its recent gains following its big NATO announcement, sinking 5.78% today as investors collected profits.
JB Hunt Transport Services’ management team warned that the logistics company sits squarely in the crosshairs of the trade war, pushing shares down 7.68%.
Omnicom Group tumbled 7.28% after the advertising firm missed revenue estimates thanks to economic uncertainty.

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PHYSICIANS: On Real Estate Investing

Posted on April 14, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

OVER HEARD IN THE FINANCIAL ADVISOR’S LOUNGE

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By Perry D’Alessio, CPA
[D’Alessio Tocci & Pell LLP]

What I see in my accounting practice is that significant accumulation in younger physician portfolio growth is not happening as it once did. This is partially because confidence in the equity markets is still not what it was; but that doctors are also looking for better solutions to support their reduced incomes.

For example, I see older doctors with about 25 percent of their wealth in the market, and even in retirement years, do not rely much on that accumulation to live on. Of this 25 percent, about 80 percent is in their retirement plan, as tax breaks for funding are just too good to ignore.

What I do see is that about 50 percent of senior physician wealth is in rental real estate, both in a private residence that has a rental component, and mixed-use properties. It is this that provides a good portion of income in retirement.

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QUESTION: So, could I add dialog about real estate as a long term solution for retirement?

Yes, as I believe a real estate concentration in the amount of 5 percent is optimal for a diversified portfolio, but in a very passive way through mutual or index funds that are invested in real estate holdings and not directly owning properties.

Today, as an option, we have the ability to take pension plan assets and transfer marketable securities for rental property to be held inside the plan collecting rents instead of dividends.

Real estate holdings never vary very much, tend to go up modestly, and have preferential tax treatment due to depreciation of the property against income.

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BENEFICIARY DESIGNATIONS: Top 10 Tips for Medical Professionals

Posted on April 14, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Beneficiary designations can provide a relatively easy way to transfer an account or insurance policy upon your death. However, if you’re not careful, missing or outdated beneficiary designations can easily cause your estate plan to go awry.

Where you can find them

Here’s a sampling of where you’ll find beneficiary designations:

Employer-sponsored retirement plans [401(k), 403(b), etc.]
IRAs
Life insurance policies
Annuities
Transfer-on-death (TOD) investment accounts
Pay-on-death (POD) bank accounts
Stock options and restricted stock
Executive deferred compensation plans
In several states, so-called “lady bird” deeds for real estate

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10 tips about beneficiary designations

Because beneficiary designations are so important, keep these things in mind in your estate planning:

Remember to name beneficiaries. If you don’t name a beneficiary, one of the following could occur:
- The account or policy may have to go through probate. This process often results in unnecessary delays, additional costs, and unfavorable income tax treatment.
- The agreement that controls the account or policy may provide for “default” beneficiaries. This could be helpful, but it’s possible the default beneficiaries may not be whom you intended.
Name both primary and contingent beneficiaries. It’s a good practice to name a “back up” or contingent beneficiary in case the primary beneficiary dies before you. Depending on your situation, you may have only a primary beneficiary. In that case, consider whether it may make sense to name a charity (or charities) as the contingent beneficiary.
Update for life events. Review your beneficiary designations regularly and update them as needed based on major life events, such as births, deaths, marriages, and divorces.
Read the instructions. Beneficiary designation forms are not all alike. Don’t just fill in names — be sure to read the form carefully. If necessary, you can draft your own customized beneficiary designation, but you should do this only with the guidance of an experienced attorney or tax advisor.
Coordinate with your will and trust. Whenever you change your will or trust, be sure to talk with your attorney about your beneficiary designations. Because these designations operate independently of your other estate planning documents, it’s important to understand how the different parts of your plan work as a whole.
Think twice before naming individual beneficiaries for particular assets. For example, you may establish three accounts of equal value initially and name a different child as beneficiary of each account. Over the years, the accounts may grow or be depleted unevenly, so the three children end up receiving different amounts — which is not what you originally intended.
Avoid naming your estate as beneficiary. If you designate a beneficiary on your 401(k), for example, it won’t have to go through probate court to be distributed to the beneficiary. If you name your estate as beneficiary, the account will have to go through probate. For IRAs and qualified retirement plans, there may also be unfavorable income tax consequences.
Use caution when naming a trust as beneficiary. Consult your attorney or CPA before naming a trust as beneficiary for IRAs, qualified retirement plans, or annuities. There are situations where it makes sense to name a trust — for example if:
- Your beneficiaries are minor children
- You’re in a second marriage
- You want to control access to funds
Be aware of tax consequences. Many assets that transfer by beneficiary designation come with special tax consequences. It’s helpful to work with an experienced tax advisor to help provide planning ideas for your particular situation.
Use disclaimers when necessary — but be careful. Sometimes a beneficiary may actually want to decline (disclaim) assets on which they’re designated as beneficiary. Keep in mind that disclaimers involve complex legal and tax issues and require careful consultation with your attorney and CPA.

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CONVERTIBLE ARBITRAGE: Defined

Posted on April 13, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Convertible Arbitrage

Convertible arbitrage is the oldest market-neutral strategy. Designed to capitalize on the relative mispricing between a convertible security (e.g. convertible bond or preferred stock) and the underlying equity, convertible arbitrage was employed as early as the 1950s.

Since then, convertible arbitrage has evolved into a sophisticated, model-intensive strategy, designed to capture the difference between the income earned by a convertible security (which is held long) and the dividend of the underlying stock (which is sold short). The resulting net positive income of the hedged position is independent of any market fluctuations. The trick is to assemble a portfolio wherein the long and short positions, responding to equity fluctuations, interest rate shifts, credit spreads and other market events offset each other.

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Hedge Fund Research (HFR) New York, offers the following description of the strategy

Convertible Arbitrage involves taking long positions in convertible securities and hedging those positions by selling short the underlying common stock. A manager will, in an effort to capitalize on relative pricing inefficiencies, purchase long positions in convertible securities, generally convertible bonds, convertible preferred stock or warrants, and hedge a portion of the equity risk by selling short the underlying common stock. Timing may be linked to a specific event relative to the underlying company, or a belief that a relative mispricing exists between the corresponding securities. Convertible securities and warrants are priced as a function of the price of the underlying stock, expected future volatility of returns, risk free interest rates, call provisions, supply and demand for specific issues and, in the case of convertible bonds, the issue-specific corporate/Treasury yield spread. Thus, there is ample room for relative mis-valuations.

Because a large part of this strategy’s gain is generated by cash flow, it is a relatively low-risk strategy.

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PHYSICIAN: Financial Education Lacking in Medical School

Posted on April 12, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

FRANKLY SPEAKING MY MIND!

By Dr. David Edward Marcinko MBA MEd CMP™

SPONSOR: http://www.CertifiedMedicalPlanner.org

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SPONSOR: http://www.MarcinkoAssociates.com

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The vast majority of physicians and medical professionals major in one of the hard science while in college; biology, engineering, chemistry, mathematics, computer science or physics; etc. Few take undergraduate courses in finance, business management, securities analysis, accounting or economics; although this paradigm is changing with modernity. These course are not particularly difficult for the pre-medical baccalaureate major, they are just not on the radar screen for time compressed and highly competitive students; nor are they needed for medical or nursing school admission, or the many related allied health professional schools.

In fact, William C. Roberts MD, originally from Emory University in Atlanta, and former editor for the Baylor University Medical Center Proceedings and The American Journal of Cardiology, opined just a decade ago:

“Of the 125 medical schools in the USA, only one of them to my knowledge offers a class related to saving or investing money.”

And so, it is important to review some basic principles of economics, finance and accounting as they relate to financial planning in thees two textbooks; and this ME-P.

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PHYSICIAN RETIREES: Home Ownership V. Home Renting

Posted on April 12, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

THE “FIVE-FIVE” FINANCIAL RULE

By Staff Reporters

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Many of the pros of home ownership will appeal to medical retirees for whom their home is their castle and who appreciate being settled both financially and geographically:

1. Building equity in your home: Each mortgage payment you make brings you closer to owning your house free and clear with no payments. If you can buy a new home or condo outright by selling your current home, you can still build equity in your new home over time.
2. Predictability: If you have a fixed-rate mortgage, your mortgage payments will remain consistent for years and you don’t have to worry about a landlord ever making you move.
3. Tax benefits: You can deduct mortgage interest and property taxes up to certain limits.
4. Customization: You don’t need a landlord’s permission to alter and improve your home.
5. Home appreciation: Homes generally increase in value, so you can increase your net worth by owning a property.

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Renting also has five significant upsides, particularly for physician retirees who want greater freedom to travel and to make bigger moves — potentially across the country or even abroad:

1. Extreme flexibility: You can leave your property after giving notice and go wherever you want much more easily than with an illiquid home you’d have to sell first.
2. Lower upfront costs: You only have to pay first and last month’s rent and a security deposit to move into a rental, not make a large home down payment.
3. No maintenance concerns: If something breaks, your landlord is responsible for the cost of fixing it and the actual repairs. You don’t have to build up an emergency fund for maintenance.
4. Predictable expenses: For the duration of your lease, your monthly housing costs including utilities will remain consistent, even if the cost of energy goes up, for example.
5. Lack of worry: If you’re in a rental apartment, you won’t have to concern yourself with shoveling snow, mowing grass or other matters of upkeep.

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DAILY UPDATE: Dow & S&P 500 Post Best Week Since 2023

Posted on April 12, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants

“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“

A Partner of the Institute of Medical Business Advisors , Inc.

http://www.MedicalBusinessAdvisors.com

SPONSORED BY: Marcinko & Associates, Inc.

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Daily Update Provided By Staff Reporters Since 2007.
How May We Serve You?

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US stocks turned higher on Friday to cap a chaotic week on Wall Street, as investors weighed the latest tariff-related developments in the trade war between the US and China.

The S&P 500 (^GSPC) rose 1.8% after seesawing earlier in the session. The tech-heavy NASDAQ Composite (^IXIC) climbed 2.1%. The Dow Jones Industrial Average (^DJI) advanced 1.5%, about 600 points.

Trump’s fast-moving tariff policy has whiplashed stocks this week with historic gains during Wednesday’s session but sharp losses on Thursday.

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In the end, the S&P 500 and Dow had their best weeks since 2023, while the NASDAQ’s 7% weekly gain was its best since 2022.

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Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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MICROSOFT: 50 Years

Posted on April 11, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters and Morning Brew

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Microsoft is celebrating its 50th birthday this week looking like a formerly washed up A-lister who’s suddenly rebounded and getting Oscar noms again.

Ever since Bill Gates and Paul Allen huddled in a garage in 1975 to start a company that’d define the experience of sitting in front of a boxy white PC monitor, Microsoft has had an uneven run. But after years of getting roasted for Internet Explorer, it now seems to be back on top—even briefly beating Apple as the world’s most valuable public company last year.

The tech giant can not only boast bonanza earnings, it also feels like a purveyor of the next big thing again, leading in the AI race through its partnership with OpenAI.

Windows washed

In the 1990s, it felt like Microsoft’s computer geeks were the overlords of tech. Windows powered most PCs, Internet Explorer became the go-to browser, and proficiency in Office tools became standard resume skills. But in the following decade, the company slept on internet tech and smartphones, ceding ground to Apple, Alphabet, and Meta.

It responded by going into midlife crisis mode, aka blowing cash on a series of questionable acquisitions to stay hip. That…didn’t help. By the 2010s, only grandparents could be reached @hotmail.com, Windows phones were a rarity, and no one used Bing as a verb.

When Gates stepped away from running the company in 2000, its new CEO Steve Ballmer grew its revenue threefold by the end of his tenure in 2013. He spearheaded Microsoft’s foray into gaming with the Xbox console and started its blockbuster cloud computing product Azure. But Microsoft’s profit growth slowed dramatically thanks to a massive cash bleed from its shopping spree.

It dropped $6.3 billion on the owner of ad tech platforms aQuantive to compete with Google’s ad business in 2007, only to write it off as a dud five years later.
The company burned at least $8 billion trying to make Windows phones a bigger force by buying Nokia’s cellphone division in 2014.
Microsoft paid $8.5 billion for Skype in 2011, which must’ve made it extra painful to announce that it was sunsetting the video calling service this winter.

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Cash-slinging comeback kid

When it blew out forty candles in 2015, the tech giant was looking past its prime. The stock was trading at around $35 a share, well below its $58 peak in 1999. Its net profit for the year was $12 billion. But investors who held on until now were rewarded with shares going for $374 on its birthday this week after the company reported a net profit of $88 billion in the last financial year.

Much of the revenue now comes from its Azure cloud computing business, which has been boosted by the booming AI industry ravenous for server power.

When Microsoft’s current CEO Satya Nadella stepped into the role in 2014, he doubled down on Azure to make Microsoft into a B2B behemoth selling computing power to tech companies.
It is now the world’s second largest cloud provider after Amazon Web Services, with a 21% market share, according to Synergy Research Group.

Microsoft also bought some businesses that didn’t fail, including LinkedIn—the thought leadership hub with a user base that has soared to 1 billion since the 2016 acquisition. It also owns GitHub, the leading code-sharing platform for software developers. And in its biggest purchase yet, it snagged gaming IP giant Activision Blizzard that owns Call of Duty and World of Warcraft for a whopping $68 billion in 2022, hoping to make itself a dominant caterer to the Xbox joystick-wielding crowd.

It’s an AI company now

The not-quite-acquisition that really got Microsoft its groundbreaker’s glitz back was pouring $13 billion into OpenAI.

Having gotten in on the ground floor of the AI boom, Microsoft is harnessing OpenAI’s models to power its CoPilot AI agent, which it embedded into its Office tools and Teams app. This pits it against other tech giants betting that AI agents automating tasks will be the biggest in-cubicle revolution since Excel.

Cite: Morning Brew April 5, 2025

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ROTH: Conversion Considerations for Physicians

Posted on April 11, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

Why would a doctor consider a Roth IRA conversion?

By Staff Reporters

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A Roth conversion involves transferring funds from a traditional retirement account—such as a 401(k), 403(b), or individual retirement account (IRA) funded with pre-tax dollars—into a Roth IRA.

The biggest benefit lies in the tax treatment of the converted funds. Once the funds are in the Roth IRA, future growth of those assets is tax-free. Withdrawals in retirement are also tax-free, assuming they meet certain criteria. As with any strategy, there are important considerations to keep in mind.

When you convert funds to a Roth IRA, the amount converted is taxable income in that tax year. For example, if you convert $100,000 from a traditional IRA to a Roth IRA, that $100,000 will be added to your taxable income in the conversion year.

Converting large amounts can result in a significant tax bill and may push you into a higher tax bracket. Even so, using retirement funds to pay taxes may make sense for those looking to convert large IRAs to reduce their future required minimum distributions (RMDs).

The timing of your Roth conversion matters too. Generally, it’s a good idea to convert when your income is lower—for example, after you’ve retired and before you begin drawing Social Security. You may also choose to convert over the course of several years to spread out the tax impacts. But if you can get comfortable with these considerations, a Roth conversion can provide you with benefits beyond tax-free growth and withdrawals.

Some of these benefits are:

Tax diversification. Having both traditional and Roth accounts allows you to manage your tax liability in retirement. For example, if your income in a given year is higher than expected, you can withdraw from the Roth IRA without increasing your taxable income.
No RMDs. Traditional IRAs and 401(k)s require you to begin taking RMDs at age 73. Roth IRAs have no RMD requirement during your lifetime. With a Roth account, you have more control over your retirement withdrawals and can leave the funds to grow for your heirs.
Benefits for heirs. Roth IRAs can be passed on to beneficiaries, who can inherit the account income tax-free. This means your heirs can enjoy the tax-free growth and withdrawals if the Roth IRA has been held for five years or more—a significant advantage, especially if your beneficiaries are in a higher tax bracket.

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FINANCIAL MODELING TERMS: All Physicians Should Review and Know

Posted on April 10, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

SPONSOR: http://www.CertifiedMedicalPlanner.org

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Financial Modeling is one of the most highly valued, but thinly understood, skills in financial analysis. The objective of financial modeling is to combine accounting, finance, and business metrics to create a forecast of a company’s future results.

According to Jeff Schmidt, a financial model is simply a spreadsheet, usually built in Microsoft Excel, that forecasts a business’s financial performance into the future. The forecast is typically based on the company’s historical performance and assumptions about the future and requires preparing an income statement, balance sheet, cash flow statement, and supporting schedules (known as a three-statement model, one of many types of approaches to financial statement modeling). From there, more advanced types of models can be built such as discounted cash flow analysis (DCF model), leveraged buyout (LBO), mergers and acquisitions (M&A), and sensitivity analysis

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DEFINED TERMS

Discounted Cash Flow (DCF): A valuation method used to estimate the value of an investment based on its expected future cash flows, adjusted for the time value of money. It’s like deciding whether a treasure chest is worth diving for now, based on the gold coins you’ll be able to cash in later.

Sensitivity Analysis: This involves changing one variable at a time to see how it affects an outcome. Imagine tweaking your coffee-to-water ratio each morning to achieve the perfect brew strength.

Budget – A budget is the amount of money a department, function, or business can spend in a given period of time. Usually, but not always, finance does this annually for the upcoming year.

Rolling Forecast – A rolling forecast maintains a consistent view over a period of time (often 12 months). When one period closes, finance adds one more period to the forecast.

Topside – A topside adjustment is an overlay to a forecast. This is typically completed by the corporate or headquarter team. As individual teams submit a forecast, the consolidated result might not make sense or align with expectations. When this occurs, the high-level teams use a topside adjustment to streamline or adjust the consolidated view.

Monte Carlo Simulation: Picture yourself at the casino, but instead of gambling your savings away, you’re using this technique to predict different outcomes of your business decisions based on random variables. It’s like playing financial roulette with the odds in your favor.

What-If Analysis: Ever daydream about what would happen if you took that leap of faith with your business? This tool allows you to explore various scenarios without risking a dime. It’s like trying on outfits in a virtual dressing room before making a purchase.

Leveraged Buyout (LBO) Model: This is a bit like orchestrating a heist, but legally. It’s about acquiring a company using borrowed money, with plans to pay off the debts with the company’s own cash flows. High stakes, high rewards.

Mergers and Acquisitions (M&A) Model: Picture two puzzle pieces coming together. This model evaluates how combining companies can create a new, more valuable entity. It’s the corporate version of a matchmaker.

Three Statement Model: The holy trinity of financial modeling, linking the income statement, balance sheet, and cash flow statement. It’s like weaving a tapestry where each thread is crucial to the overall picture.

Capital Asset Pricing Model (CAPM): A formula that calculates the expected return on an investment, considering its risk compared to the market. It’s like choosing the best roller coaster in the park, balancing thrill and safety.

Cash Flow Forecasting: This is your financial weather forecast, predicting the cash flow climate of your business. It helps you plan for sunny days and save for the rainy ones.

Cost of Capital: The price of financing your business, whether through debt or equity. It’s like the interest rate on your growth engine, pushing you to maximize every dollar invested.

Debt Schedule: A timeline of your business’s debts, showing when and how much you owe. It’s your roadmap to becoming debt-free, one milestone at a time.

Equity Valuation: Determining the value of a company’s shares. It’s like assessing the worth of a rare gemstone, ensuring investors pay a fair price for a piece of the treasure.

Financial Leverage: Using debt to amplify returns on investment. It’s like using a lever to lift a heavy object, increasing force but also risk.

Forecast Model: A crystal ball for your finances, projecting future performance based on past and present data. It’s your guide through the financial wilderness, helping you navigate with confidence.

Operating Model: A detailed blueprint of how a business generates value, mapping out operational activities and their financial impact. It’s like laying out the inner workings of a clock, ensuring every gear turns smoothly.

Revenue Growth Model: This tracks potential increases in sales over time, charting a course for expansion. It’s like plotting your ascent up a mountain, anticipating the effort required to reach the summit.

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Registered Investment Advisor VERSUS Hedge Fund Manager

Posted on April 7, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

SPONSOR: http://www.CertifiedMedicalPlanner.org

By Staff Reporters

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The Hedge Fund manager I am considering is a Registered Investment Adviser [RIA]

QUESTION: What is a Registered Investment Advisor?

If the fund manager is an entity, then any individual you deal with will be a registered investment adviser representative. If the fund manager is an individual, then that individual is a registered investment adviser. In either case, the designation implies several steps have been taken.

In order to become a registered investment adviser, an individual must register for and pass the Series 65 Uniform Investment Adviser Law Exam, a three-hour, 130-question computer-based exam administered by the North American Securities Administrators Association. Topics covered include economics and analysis, investment vehicles, investment recommendations and strategies, and ethics and legal guidelines. A passing score is 70 percent or higher.

Once an individual has passed the Series 65, he or she must then apply via Form ADV to become a registered investment adviser. This application is made to either a state authority or to the SEC, depending on the adviser’s assets under management. If assets under management exceed $30 million, then the adviser must register with the SEC.

Form ADV consists of two parts. Part I provides general information to the regulatory authority. Part II is designed to be distributed to potential clients, and includes disclosure of a decent amount of information about the adviser. If the manager is a registered investment adviser, then you should expect to receive as part of the offering documentation either a current copy of Part II of the adviser’s Form ADV or a brochure that contains all the current information in Part II of Form ADV.

In addition to filing Form ADV and paying a small fee, the registered investment adviser becomes subject to extra administrative/regulatory burden as well as capital adequacy requirements that state the Adviser must maintain certain net worth levels.

By and large, because of the extra administrative burden as well as restrictions on certain activities, hedge fund managers attempt to avoid registering as investment advisers. Whether such managers can or cannot avoid such registration is largely dependent upon the state in which the manager operates. In California, for instance, hedge fund managers must register as investment advisers. In New York, such registration is not necessary. Not surprisingly, hedge fund managers located in California are rare, while they are quite plentiful in New York.

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HEDGE FUND: Wrap Fees?

Posted on April 5, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

Staff Reporters

SPONSOR: http://www.CertifiedMedicalPlanner.org

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My stock broker is telling me about a “wrap-fee” program involving a hedge fund manager.

QUESTION: What is a Wrap Fee?

A wrap fee program is a service that provides investment advice and portfolio management to clients for one all-inclusive fee. The fee pays for the services provided to the client, including but not limited to securities transactions, portfolio management, research, brokerage, and administrative services. Wrap fee programs also provide an understanding of a client’s financial goals and objectives; research and selection of assets; implementation of investment decisions; account statements, and access to real-time financial data.

The Investment Advisers Act of 1940 regulates investment advisors when they offer these wrap fee programs and requires them to provide comprehensive disclosure documents before investing. This act helps ensure clients have access to all important information that affects their investment decisions.

QUESTION: Why do I need my stock broker? Can I just go directly to the hedge fund manager?

Yes, you can, but you may find a different fee arrangement when you reach the hedge fund manager, and you may be participating in an unethical transaction. When hedge fund managers set up separate accounts for wrap-fee clients, they agree to take a set fee in exchange for managing this money. They also enter into agreements with one or more brokers to help market this aspect of their money management business. A portion of the wrap fee you pay goes to the broker, and a portion goes to the manager. Incentive compensation is not generally used.

When approached directly, hedge fund managers will typically offer only the hedge fund, complete with incentive compensation and pooled investment features. However, if the hedge fund manager is willing to set up a separate account, it is possible that the investor will find the set fee much less than what he or she would have paid in a wrap fee account through a broker.

Finally, the very large caveat to all this is that the ethics of a hedge fund manager who steals clients from brokers with whom he has a marketing relationship ought to be called into question. And when it comes to hedge funds, the ethics of the manager are of paramount importance.

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Filed under: "Ask-an-Advisor", CMP Program, Ethics, Financial Planning, Funding Basics, Glossary Terms, Investing, Portfolio Management | Tagged: broker, certified medical planner, CMP, compensation, diversification, Ethics, finance, hedge fund manager, hedge funds, IAA 1940, Investing, Investment Advisors Act, money, personal-finance, portfolio manager, stock broker, stocks, wrap fees | Leave a comment »

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