Some medical professionals believe that a hot stock tip, rather than conscientious industry, is required for investment success. For most, waiting for that lucky tip to produce an income cash stream is not enough.

Others are fiduciaries of hospitals or endowment funds, held to a high standard. This involves more than hiring investment managers based on past performance, or an attitude of little accountability. Mutual collaboration is needed for a governing document or Medical Investment Policy Statement© (MIPS©). It determines objectives, risk level, diversification, sector weighting, investment style and time frame. Success involves forward thinking analysis, not a review of past return rates, at various market and economic assumptions.

• Investors are inherently risk adverse and demand more return with greater risk
• Capital markets are a fundamentally efficient mechanism
• Portfolio characteristics, not individual securities, are the key to performance
• An optimal portfolio (efficient frontier) exists at any given risk level, at any time
• Strategic or dynamic asset rebalancing is used to maintain the efficient frontier

Modern Portfolio Theory (MPT)

Collectively, known as Modern Portfolio Theory (MPT), the hypothesis was confirmed by Brinson, Hood and Beebower, who demonstrated that 94% of portfolio returns are explained by diversification. This study supports the concept that it is better to be in the "right asset class", than the "right investment", and that asset allocation is the main determinant of portfolio performance, not security selection or market timing.

‘Mutual collaboration is needed to develop a governing document, known as a Medical Investment Policy Statement©’

Unfortunately, some analysts hired by Wall Street to disregard MPT and make buy, sell or hold recommendations, are suspect because of their pack mentality. There is usually a lead analyst for each stock, and when he moves, the others follow. They often worry about investment-banking clients. The conflict of interest is obvious.

Utilizing stochastic dampening economic techniques grounded in MPT, our independent National Association of Securities Dealers (NASD), affiliated Registered Investment Advisor Representatives (RIAs), and/or Securities Exchange Commission (SEC) affiliated Broker-Dealer (BD) Registered Representatives (RRs), manage your assets in a fiscally responsible fashion. Liability is reduced, results are achieved and stress is ameliorated in a cost efficient manner*.

Historically, quality independent money managers were only available to universities or large corporations. However, we can access many institutional asset management programs because of broadband technology and critical mass. According to a survey done by Yankelovich Partners, managed accounts are surging in popularity for reasons such as capital accumulation, capital preservation, portfolio customization, initial and on-going due diligence.

‘Managed accounts are most suited for non-qualified and/or qualified assets, based on either Private Portfolio Account or Separate Mutual Fund Account.’

Managed accounts are most suited for non-qualified and/or qualified assets, based on either of the two approaches below: Private Portfolio Account: Invests in a separately managed portfolio of 15-25 individual securities, to establish a tax basis for the control and realization of capital gains or losses. Stocks are selected among the universe of securities by examining a compilation of various databases of more than one thousand companies. Experienced fundamental analysis and market conditions are then used to further examine, refine and select the very best prospects from among more than 31 domestic and international industry sectors. When individual bonds are used, interest rate risk can be better managed with predictable maturity dates.

Separate Mutual Fund Account:
Invests in a globally scrutinized portfolio of equity or debt based instruments, to diversify across and within asset classes, using carefully structured open-ended mutual funds with individually monitored professional managers. SMFAs recognize that the needs of some high net worth medical professionals are complex and not met by a single investment vehicle, and necessitating a global network of specialists. This "manager of managers" approach strictly adheres to your IPS and reduces risk intolerance or style drift in a remarkably efficient manner. Economics of scale and web-based electronic connectivity reduce the fee layering that previously hindered returns.

Ideal Clients
Your investment portfolio, retirement plan or foundation fund, may be ideal for these programs, if:
       You, are serious about investment success and creating wealth over time
       You, have significant free assets, or make other arrangements with us
       You, wish to reduce your liability as a fiduciary appointee
       You, desire more leisure time to enjoy life by utilizing professional advisors

When involved in these programs, your Certified Medical Planner© will hold a quarterly service meeting with you for a detailed review of your investment holdings and progress. Since these relationships are long-term, even generational, "face time" is important to understand the realities of market cycles to benefit most from this service.

*Asset management accounts are not for everyone and are based on trust and understanding of goals and objectives. Fee based asset management programs are cost effective and remove commission-based conflicts of interest. Of course results are not guaranteed.