HIGH-FREQUENCY TRADING: Algorithmic Computerized Stock Trading

Posted on November 6, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Dr. David Edward Marcinko MBA MEd

SPONSOR: http://www.MarcinkoAssociates.com

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High-frequency trading (HFT) is a form of algorithmic trading that uses powerful computers and complex programs to execute thousands of trades in fractions of a second. It has transformed modern financial markets by increasing speed, liquidity, and efficiency—but also raised concerns about fairness and stability.

High-frequency trading emerged in the early 2000s as technological advances allowed financial firms to process market data and execute trades faster than ever before. HFT firms use sophisticated algorithms to analyze multiple markets and identify short-term opportunities. These trades are often held for mere seconds or milliseconds, and profits are made by exploiting tiny price discrepancies across assets or exchanges.

One of the defining features of HFT is its reliance on speed. Firms invest heavily in infrastructure—such as co-location services near exchange servers and fiber-optic cables—to gain microsecond advantages over competitors. This race for speed has led to a technological arms race, where milliseconds can mean millions in profit.

HFT contributes significantly to market liquidity, meaning it helps ensure that buyers and sellers can transact quickly at stable prices. By constantly placing and updating orders, HFT firms narrow bid-ask spreads and reduce transaction costs for other market participants. This has made markets more efficient and accessible, especially for retail investors.

However, HFT is not without controversy. Critics argue that it creates an uneven playing field, where firms with access to advanced technology and capital can dominate markets. Concerns about market manipulation—such as quote stuffing (flooding the market with orders to slow competitors) or spoofing (placing fake orders to move prices)—have led to increased regulatory scrutiny.

The 2010 Flash Crash is often cited as a cautionary example of HFT’s potential risks. During this event, the Dow Jones Industrial Average plunged nearly 1,000 points in minutes before rebounding. Investigations revealed that automated trading systems, including HFT algorithms, contributed to the sudden loss of liquidity and extreme volatility.

Regulators have responded by implementing safeguards such as circuit breakers, which pause trading during extreme price movements, and requiring firms to register and disclose their trading strategies. The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) continue to monitor HFT’s impact on market integrity.

Despite its challenges, HFT remains a dominant force in global finance. It accounts for a significant portion of trading volume in equities, futures, and foreign exchange markets. Many institutional investors rely on HFT strategies to manage large portfolios and hedge risks.

In conclusion, high-frequency trading represents both the promise and peril of technological innovation in finance. While it enhances market efficiency and liquidity, it also introduces new risks and ethical dilemmas.

As markets evolve, balancing innovation with fairness and stability will be essential to ensuring that HFT serves the broader interests of investors and the economy.

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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 

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PHYSICIANS: Side Gigs and Hustles?

Posted on August 19, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Dr. David Edward Marcinko MBA MEd

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In today’s dynamic economic landscape, the concept of a “side hustle” has evolved from a mere trend to an essential component of personal financial strategy for many individuals; even doctors.

BROKE DOCTORS: https://medicalexecutivepost.com/2025/08/02/doctors-going-broke-and-living-paycheck-to-paycheck/

What Is a Side Hustle?

A side hustle is a way to earn extra income outside of your primary job or main source of employment. It typically involves part-time work, freelancing, small businesses, or gig-based activities that can be pursued flexibly in your free time. Unlike traditional employment, side hustles often offer more autonomy, creative freedom, and the potential to monetize skills, hobbies, or passions.

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Doctor Gigs?

So, if you’re a doctor, dentist or podiatrist considering a side hustle, focus on something sustainable and long-term. Ask yourself: What am I already good at? What do people already ask me to help with? The best side hustles don’t require reinventing the wheel — just monetizing the one you’ve already been pushing uphill.

EXAMPLES: https://www.physiciansidegigs.com/side-gigs

But, avoid gigs that require a huge upfront investment or promise overnight success. Instead, look for something that offers flexibility, ideally something that works with your schedule, not against your sanity.

MONEY ADDICTION: https://medicalexecutivepost.com/2025/08/07/moiney-addicted-physicians-the-investing-and-trading-personality-of-doctors/

Track your earnings and how much time you’re putting in. Side income should support your goals, whether that’s paying off debt, saving for a trip or just breathing easier when office rent comes due.

But, if it’s draining your energy from your medical practice with little to show for it, it might be time to rethink the hustle.

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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 -OR- http://www.MarcinkoAssociates.com

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DIVIDEND STOCK ARISTOCRATS: Pros and Cons

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

By AI

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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

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

Disadvantages

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

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

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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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  • 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%.

CITE: https://tinyurl.com/tj8smmes

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

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STOCK DIVIDENDS: Company Earnings Distribution

Posted on March 2, 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

DEFINITION

If the definition of a security is title to a stream of cash flows, then the dividends a company is expected to pay to equity shareholders on a periodic basis (e.g., quarterly) are a clear source of return for an investor.  A dividend is simply a distribution of (some portion of) the company’s earnings to equity shareholders.  Like a bond yield, a stock’s dividend yield can be used to measure the income return on the stock. 

To determine a stock’s dividend yield, the trailing year’s dividends per share paid are divided by the current stock price.  However, a key difference between a dividend yield and a bond yield is the level of certainty that can be assumed regarding future payments, since a bond’s coupon is generally predetermined and its payment is expected to be senior to the payment of dividends.

After a company has determined that it has earned a profit, management has to decide what to do with those profits.  One choice is to distribute the earnings to shareholders in the form of dividends, while another option is to reinvest the profits in the company.  A company’s management may determine that the shareholders interest is best served by using the earnings to pursue growth opportunities (e.g., capital expansion, research & development, etc.) at the corporate level.  Thus, when management believes that its investment opportunities are likely to produce a higher return than what investors’ could generate with their dividends or that reinvestment is needed to maintain its financial strength, the company will retain the earnings. 

One of the biggest myths in investing is capital appreciation accounts for the largest part of investors’ gains. Dividends, or cash payments to shareholders, actually account for a substantial part of an equity investor’s total return. In fact since 1926, dividends have accounted for more than 40% of the total return of the S&P 500 stock index. In the last decade (2000-2009), the S&P 500’s total return of -9% would have been a heftier loss of -24% had it not been for the 15% contribution from dividends.

History has shown that dividends have been a powerful source of total return in a diversified investment portfolio, especially during periods of market turbulence. In examining the prior eight decades of stock market performance, dividends often account for more than 2/3 of the total return (1930s, 1940s, 1970s, & 2000s).  If an investor avoided dividend paying stocks during these elongated time periods, most of the total gains would be lost. 

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DIVIDEND CONTRIBUTION OF S&P 500 RETURN BY DECADE   
 S&P 500 CumulativeDividendsAverage 
 Price %DividendTotal% of TotalPayout 
YearsChangeContribution*ReturnReturnRatio** 
       
1930s-41.9%56.0%14.1%>100%90.1% 
1940s34.8%100.3%135.0%74.3%59.4% 
1950s256.7%180.0%436.7%41.2%54.6% 
1960s53.7%54.2%107.9%50.2%56.0% 
1970s17.2%59.1%76.4%77.4%45.5% 
1980s227.4%143.1%370.5%38.6%48.6% 
1990s315.7%117.1%432.8%27.0%47.6% 
2000s-24.1%15.0%-9.1%>100%35.3% 
2010s27.9%8.4%36.3%23.1%28.4% 
as of 12/31/12      

Source: Strategas

During those decades such as the 2000s where the stock market struggled to advance, dividends were a significant element for investor survival.  This is not only due to the dividends alone, but also the risk element of stocks that pay dividends.  Dividend stocks have historically provided lower overall volatility and stronger downside protection when markets decline. Since 1927, dividend stocks have consistently held up better than the broader market during downturns. You can measure downside risk through a statistic known as downside capture ratio.

Downside capture ratio is a statistical measure of overall performance in a down stock market. An investment category, or investment manager, who has a down-market ratio less than 100 has outperformed the index during a falling stock market. 

For example, a down-market capture ratio of 80 indicates that the portfolio measure declined only 80% as much as the index during the period. The downside capture ratio of high-dividend-yielding stocks, since 1927, has been 81% or lower over various long-term periods.  Put a better way, during months that the S&P 500 stock index fell, dividend stocks declined by nearly 19% less than the broader market.

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DOWNSIDE AND UPSIDE CAPTURE RATIOS OF HIGH DIVIDEND STOCKS – 1927 TO 2011  
The lower the number, the better    
                                                                            Downside 
                                                                              Capture Ratio 
   
Since 192781.53 
50-year67.45 
30-year65.86 
20-year65.83 
10-year81.61 
   

Source: Kenneth French as of 12/31/11

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: CONTACT: MarcinkoAdvisors@outlook.com 

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BEAR MARKETS: Passive Income?

Posted on November 19, 2022 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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DEFINITION: Passive income is a type of unearned income that is acquired automatically with minimal labor to earn or maintain. It is often combined with another source of income. In the United States, the IRS divides income into three categories: active income, passive income, and portfolio income.

CITE: https://www.r2library.com/Resource/Title/082610254

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Bear markets can accelerate your passive income

For those physicians fully invested in non-dividend-paying stocks, bear markets are a difficult time. However, they’re an opportunity for those with cash or income-producing assets.

WY? Bear markets can accelerate any investors’ capacity to generate passive income because they can turn dividend income and idle cash into bigger income streams. That can enable investors to make more money in the future, putting them even closer to reaching their financial goals.

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FINANCE: https://www.routledge.com/Comprehensive-Financial-Planning-Strategies-for-Doctors-and-Advisors-Best/Marcinko-Hetico/p/book/9781482240283

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For Doctors Considering Rental House Investments?

Posted on November 23, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

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Risks versus Rewards

By Rick Kahler MS CFP® ChFC CCIM www.KahlerFinancial.com

Landlord!

The very word implies wealth, authority, and status. Maybe that’s one of the reasons there are so many books and seminars claiming to teach you how to build wealth by owning rental property.

Yes, medical professionals can get rich as a landlord. Doctors can go broke, too.

And, in between those two extremes, you can find yourself dealing with a bunch of problems like leaking roofs, non-paying tenants, and economic downturns. The risks of building wealth with real estate are substantial. This is true whether you want to become the biggest property owner in town or just buy a second home as a rental to help finance your retirement.

Points of Consideration

With real estate prices still low after the collapse of the housing bubble, and with the current low interest rates, it may be a great time to buy a second home. Before even considering such a purchase, though, here are some important points to consider:

1. Do you plan to eventually live in the house yourself? If so, buying it now and having a tenant pay the mortgage for you might be a great move. Still, you need to take the following factors into consideration and make your decision carefully.

2. Will you need current income from the property? Then you’ll need to be able to buy it without a mortgage. Otherwise, the mortgage and other expenses will eat up most of the rent payments, and you won’t have any cash flow.

3. Do you have the time and skills to manage the property yourself? Water heaters quit, pipes need replaced, and furnaces go on the blink. Will you be able to do your own maintenance or spend the money to hire it done? Are you available to check out prospective tenants and show the property? A management company can relieve you of the hassles of arranging for repairs and vetting tenants. You’ll still pay the bills, though, plus fees of perhaps ten percent of the rent.

4. Be realistic to the point of pessimism about your expected return. Assume that expenses—repairs, maintenance, taxes, and insurance—will be about 50% of the gross rental income. Always figure the income based on a property being vacant for several months of the year.

5. Be aware that a more expensive house won’t necessarily provide a corresponding increase in rent. The rental market eventually tops out. If a $150,000 house rents for $800 a month, a $350,000 house may only rent for about $1400.

6. If your main reason for owning real estate is investment income, and you have a small amount of money or don’t want the risk and management headaches of owning a house, a real estate investment trust (REIT) is often a wiser choice than owning real estate directly.

7. Be patient. If you over-buy income property and try to get rich quick, you risk losing it all. At one-time, Rapid City lost a number of military jobs and rental properties were sitting vacant. As I scrambled to make mortgage payments, it felt as if I didn’t own my rental houses, they owned me. Right now I have interests in companies that own paid-for rental property, but getting to that point took over 30 years.

Assessment

The IRS classifies some income from rental property as “passive.” Trust me, there’s nothing passive about being a landlord. Owning rental property can certainly be one way to add to your net worth and contribute to a comfortable retirement. Just like any other form of wealth-building, however, it requires education, good decision-making, an awareness of the risks, and plenty of effort.

Conclusion

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