Implications of Portfolio Withdrawals for Physician Investors

Obtaining Income in a Low Interest-Rate Economic Ecosystem
By Jeffery S. Coons; PhD, CFP®
Managing Principal-Manning & Napier Advisors, Inc
The general trend of declining interest rates experienced over the last decade and a-half, part of a long-term trend Manning & Napier Advisors, Inc. had focused on since the early 1980’s, created new challenges for managing investment [...]

Healthcare Franchising and Investing

New-Wave Physician Opportunities?
Staff Reporters
Did you know that there are several viable alternative practice and investment vehicles physicians can consider rather than traditional medical practice and investing? And, they’re in the healthcare field?
Traditional Franchises
For example, franchise opportunities currently exist through vein-treatment, medical spa and weight-loss centers; and are well known. 
Non-Traditional Franchises
But, franchise opportunities also exist [...]

Financial Advisors Not “Up” on Annuities?

Results of a New Survey
Staff Reporters
In the interactive June edition of Investment Advisor magazine, Savita Iyer-Ahrestani reported on a new study of annuities.
Of course, subscribers of the Executive-Post already know that more and more Americans are counting on financial advisors to help them prepare for a secure retirement; rightly or wrongly. And, this includes [...]

Economics of Variable Annuities

The “Ups and Downs” of Variable Investments
Staff Writers
The chief advantage of variable annuities is that investment income or gains are not currently taxable. However, when distributions are made, all gain is ordinary income, even if substantially all of the gains realized on the investment were capital gains.
Investments made directly by a Family Owned Business [...]

“S” Corporation [Case Law] Tax Advantages

Family Owned Business [FOB]
Staff Writers
Some doctors understand the advantages that S corporations have over regularly taxed C corporations—and vice versa. But, an unfamiliar Tax Court decision, more than a decade ago, points up an advantage for S corporations that are sometimes overlooked.
Scenario
Suppose the owners of a family corporation are about to retire. Their children will [...]

Alphabet Soup: Financial Designations & Certificates

financial-designationsjuly
July 2008:
AUTHORS: Dr. David Edward Marcinko; MBA, CMP™ and Hope Rachel Hetico; RN, MHA, CMP™
POSITION: Publisher-in-Chief, and Managing Editor of the Executive-Post, respectively.
TOPIC: Financial Designations and Certifications [Alphabet Soup of Industry Obfuscation and Self-Promotion, or Real Gravitas – You Decide?]
EXCERPT: “Until recently, most financial advisors were regulated by the NASD, the National Association of Securities [...]

Worthless FOB Stocks

Getting the Tax Deduction
Staff Writers
All physicians and other investors should know when their stock becomes worthless.
Example Scenario:
Some time ago, an FOB physician investor [Family Owned Business] founded two FOBs: One was doing fine while the other floundered. Under the IRS Tax Code, the investor can receive a loss deduction on the second FOB if: 1) [...]

Dining and IRS Induced Gastroenteritis

Doctor’s Beware Taxation on Rebates
Staff Writers
In the past decade or so, several companies has been marketing a culinary twist on airline frequent flyer programs—a kind of frequent-eater program.
Under the program, doctors who love to hold “business meetings”, and other diners use their regular credit cards to charge meals at participating restaurants, and the program [...]

The Herd Mentality of Wall Street [Advice or Avarice?]

Understanding the Channel-of-Distribution Follies
By Dr. David Edward Marcinko; MBA, CMP™

Publisher-in-Chief

Former Investment Advisor and Reformed Certified Financial Planner™

As a former surgeon, insurance agent, physician-executive who took an honest run at Wall Street’s PPMC infamy in the late 90s, board certified financial advisor and stock-broker; and current writer, editor, publisher and speaker-consultant on health economic topics I am [...]

Selecting Tax-Return Preparers

What Doctors Need to Know about Preparers
Staff Writers
Most doctors and medical professionals are not thinking about tax season right now. But, according to Executive-Post supporter Rachel Pentin-Maki; RN, MHA “now may be the best time to rethink your relationship with your tax-preparer.”
All Tax Preparer’s not equal!
All tax return preparers are not the same. They [...]

The Uniform Prudent Investor’s Act

A Trust Primer for Physicians
By Charles L. Stanley; CFP™ ChFC
Since inception, the Uniform Prudent Investor Act (UPIA) has changed the financial advisory landscape. Essentially, the act modified the legal criteria of “prudent investing” for trusts.
Now, all assets owned by a trust are considered “investments” for purposes of the Uniform Prudent Investor Act. Consequently, for [...]

Corporate Minutes and IRS Tax Savings

It Pays for Doctors to Keep Records
By Dr. David Edward Marcinko; MBA, CMP™
Publisher-in-Chief
More than a few medical professionals have ownership in small corporations outside of their medical practice, or day-job as physician-healers. More are contemplating same, as the healthcare insurance crisis grows, and the social and economic swagger of physicians decrease.
Small Corporations
But, some [...]

How to Interview a Portfolio Manager?

Selection Criteria Critical for Physicians
By Dr. David Edward Marcinko; FACFAS, MBA, CMP™
Publisher-in-Chief and former reformed Certified Financial Planner™
Recently in the Atlanta area, two high-profile financial advisors and portfolio investment managers have been charged with client embezzlement, malfeasance, and more!
The first was Kirk Wright, a Harvard-educated fund manager who was convicted last week in a fraud scheme [...]

Debt-Based Portfolio Decisions

An Establishment Checklist
Staff Writers
Determining the percentage of debt-based assets for any medical investment portfolio - personal, institutional or endowment - is an often difficult decision.
Too much risk may lead to default loss, while too little risk may cause under-performance in the portfolio; neither optimizing the efficient frontier.
And so, the following checklist may help initiate [...]

Professionally Managed Portfolios and Mutual Funds

Advantages and Disadvantages for Physician Investors
Staff Writers
The following briefly summarizes the advantages and disadvantages of professionally managed portfolios and mutual funds according to size and taxation factors.
Portfolio Size
A major factor that impacts the selection process is the size of the physician-investor’s portfolio. For example, is there a size at which it makes more sense [...]

KISS Investment Strategies

Warren Buffett on Index Funds
Staff Reporters
Did you know that over 31,000 investors flocked to this year’s annual meeting for Warren Buffet’s Berkshire Hathaway – also referred to as “Woodstock for Capitalists?”
Assessment
And when a shareholder asked for the single-best specific investment idea that Warren Buffett could recommend to an individual in his 30s, Buffett said:
“I [...]

Interest Rate Options

Treasury Issues Options
By William H. Mears; CPA, JD
Interest rate options are usually options on Treasury instruments, Treasury bills, notes, and bonds. The face values used are $1 million for Treasury bills and $100,000 for T-notes and bonds.
Purpose
With these options, a physician or other investor will bet on the direction of interest rates. When interest [...]

Put and Zero Coupon Bonds

Understanding Debt Puts and Debt Zeroes
Staff Writers
Put Bonds
Put bonds are so-called because they allow doctor-investors and other bondholders to give bonds (put) back to the issuer at par on specified dates prior to maturity. Put bonds have either a fixed or variable interest rate and may have single or multiple tender dates.
Furthermore, they can [...]

Investing in Options

An Appropriateness Summary
By William H. Mears; CPA, JD
Options trading involve a high degree of risk in that the physician or other investor may lose their entire investment when the option expires. As a result, options trading may not be suitable for all doctors or investors.
Suitability
All trading firms must have a procedure in place that requires [...]

General Obligation and Revenue Bonds

Understanding GOs and RBs
Staff Writers
General obligation bonds are secured by the taxing authority and are therefore considered safer than other municipals. The full faith and credit of the municipality ensures prompt payment of principal and interest.
Further more, most municipal bonds, including city, county, and school district issues, are secured by a pledge of unlimited [...]

Using Option Derivatives

Why Options Investing?
By William H. Mears; CPA, JD
Although options can be used to raise cash from a long stock position that is not salable, individual physician-investors should use options primarily as a hedging mechanism. Individuals and doctors may want to hedge their portfolios to gain peace of mind by purchasing portfolio insurance to guard against [...]

Understanding Municipal [Muni] Bonds

State and Local Debt Issues
Staff Writers
Municipal bonds are issued by state and local governments for building schools, bridges, hospitals, and other municipal facilities. These bonds depend upon their tax base to generate the income to pay the interest and retire the debt.
Tax-Exempt Status
The most important feature of municipal bonds is their tax-exempt status. While [...]

The Options Clearing Corporation

Option Positions and Exercise Limits
By William H. Mears; CPA, JD
The Options Clearing Corporation [OCC] places certain limits on the number of contracts that can be outstanding on each side of the market for individual securities. These position limits vary from underlying security to underlying security. However, they range from 4,500 to 10,500 contracts. The number [...]

Options and Market Price

In, At, and Out-of-the-Money
By William H. Mears; CPA, JD
A call option is in-the-money if the market price of the stock is higher than the exercise price of the option.
If the market price of the stock was the same as the exercise price of the call option, the option would be at-the-money.
If the market [...]

Secular Annuities

What Exactly is a Secular Hospital Annuity?
Your assistance is appreciated.
Thank you.
Anonymous Physician-Executive
Lake Worth, Florida
 

Variable Annuities?

Point-Counter Point Debates
Question:
Annuities are a controversial product in the financial services industry today; especially variable equity annuities. They are often touted as a solution to the retirement income question for medical professionals. Many sales consultants and financial advisors advocate their use; while others absolutely detest and abhor them. And, it has been said that annuities [...]

High-Yield Bonds

Understanding Junk Bonds
Staff Writers
High Yield Bonds [HYBs] are debt issued by U.S. corporations that carry less than investment-grade ratings. They are also referred to as “junk bonds.” For the purpose of high-yield bonds; below investment grade means Ba or lower; as ranked by Moody’s, and BB or lower by Standard & Poor’s.
The Market
The market [...]

Understanding Options

A Misunderstood Derivative
By William H. Mears; CPA, JD
An option is either the right to buy or sell an asset, or the obligation to buy or sell an asset. Options are derivative instruments; i.e., they derive their value from the performance of the asset upon which they are based—the underlying asset or security. This can be [...]

The Secular Trust

An Irrevocable Vehicle
By LaVerne L. Dotson; JD, CPA
A secular trust is typically an irrevocable trust designed so that creditors of a hospital employer, including bankruptcy creditors, cannot attach its funds.
Taxes
Consequently, the employer’s contributions to an irrevocable trust, often means the trust’s earnings are taxable income to the employee.
Benefits
Benefits are normally payable to the [...]

Hospital Stock-Purchase Plans

What They Are - How They Work
By LaVerne L. Dotson; JD, CPA
A hospital employee stock-purchase plan qualified under Code § 423 allows eligible employees to purchase stock of an employer under special tax rules and favorable prices.
Intent and Purpose
An employee stock-purchase plan is intended to benefit virtually all employees, not just exceptional ones or limited [...]