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The Importance of Your Children having a Job
Issue #475, June 16, 2017

The Problem with Medical Student Debt is—the Med Schools
Issue #474, June 12, 2017

Critters and Varmints in your Home and Yard
Issue #473A, June 07, 2017

Leveraged ETFs
Issue #472, May 29, 2017

Leasing a Vehicle: Don’t!
Issue #471, May 22, 2017

Escheat
Issue #470, May 15, 2017

More on Buying Jewelry
Issue #469, May 08, 2017

Buying Jewelry: Gold, Diamonds and Pearls
Issue #468, April 30, 2017

Thomas Sowell: Part III of III
Issue #467, April 24, 2017

Thomas Sowell: Pat II of III
Issue #466, April 17, 2017

Live Close to Where You Work
Issue #465, April 10, 2017

Medtronic in Hospital Management
Issue #Interim Bulletin #464A, April 07, 2017

Thomas Sowell: Part I of II
Issue #464, April 03, 2017

A Political Contribution a an Investment: Part II of II
Issue #463, March 27, 2017

A Political Contribution as an Investment: Part I of II
Issue #462, March 20, 2017

Buffett Selling Vacation Home
Issue #461, March 13, 2017

Advanced Placement (AP) ourses
Issue #460, March 06, 2017

The Importance of a Credit History
Issue #459A, March 02, 2017

A Credit Card Scam
Issue #459, February 27, 2017

The Electronic Health Reord
Issue #458, February 20, 2017

Contracts
Issue #457, February 13, 2017

Platinum and Palladium
Issue #456, February 06, 2017

Economic Outlook for 2017: Part II of II
Issue #455A, February 02, 2017

Economic Outlook for 2017: Part I of II
Issue #455, January 30, 2017

A Story From Vegas
Issue #454A, January 25, 2017

Land Donation Deals and the IRS
Issue #454, January 23, 2017

The Theory of Gambler’s Ruin
Issue #453, January 16, 2017

Student Loans: But Wait, There’s More!
Issue #452, January 13, 2017

A Second Home
Issue #Interim Bulletin #451A, January 04, 2017

The Consumer Confidence Index
Issue #451, January 02, 2017

Social Security
Issue #450, December 26, 2016

My Outlook for 2017: Part II of II
Issue #449, December 19, 2016

My Outlook for 2017: The Market
Issue #448, December 12, 2016

Medicine in 20 Years
Issue #447, December 05, 2016

Higher Interest Rates
Issue #446, November 28, 2016

Trump and the Markets: The Bad and Ugly
Issue #445A, November 23, 2016

Trump and the Markets: The Good
Issue #445, November 21, 2016

Negative Trends: The Suits aren’t Makin’ Steel
Issue #444, November 16, 2016

The New DOJ Fiduciary Rule
Issue #443, November 07, 2016

Barron’s Conference, Part IV of IV
Issue #442, October 31, 2016

Barron’s Conference, Part III of IV
Issue #Interim Bulletin #441A, October 26, 2016

Barron’s Conference, Part II of IV
Issue #441, October 24, 2016

Barron’s Conference, Part I of IV
Issue #440, October 20, 2016

This Newsletter
Issue #439A, October 12, 2016

Memoirs of US Grant: Vol II
Issue #439, October 10, 2016

More Points on Collecting, Investing and the Economy
Issue #Interim Bulletin #438A, October 05, 2016

Personal Memoirs of US Grant
Issue #438, October 03, 2016

Ideas for a High School Part-Time Job
Issue #Interim Bulletin #437A, September 29, 2016

Collecting, Investing, and the Economy
Issue #437, September 26, 2016

Free College
Issue #436A, September 22, 2016

A Military Commitment to Pay for Med School
Issue #436, September 19, 2016

When a CD isn’t a CD
Issue #435, September 12, 2016

I Made a Mistake
Issue #Interim Bulletin #434A, September 07, 2016

What is Your Spare Time Worth?
Issue #434, September 05, 2016

Credit Cards and Bonus/Loyalty Points
Issue #433, August 29, 2016

The Write-off of Student Loans
Issue #Interim Bulletin #432A, August 25, 2016

412 Retirement Plans
Issue #432, August 22, 2016

Join the Club
Issue #Interim Bulletin #431A, August 18, 2016

The Case for Precious Metals and Hard Assets
Issue #431, August 15, 2016

When the US went off the Silver Standard
Issue #430, August 08, 2016

Why NOT to Open a Restaurant
Issue #429, August 01, 2016

Some Tips on Life Insurance
Issue #428, July 25, 2016

More Observations on Negative Interest Rates
Issue #427, July 18, 2016

Embezzlement
Issue #426, July 11, 2016

Is a PhD Worth It? Part II of II
Issue #425, July 04, 2016

Is a PhD Worth It? Part I of II
Issue #424, June 27, 2016

Avoid Part-time real Estate Agents
Issue #423, June 20, 2016

The VIX
Issue #422, June 13, 2016

The Problem with Auction Reserves
Issue #421, June 06, 2016

Make Full Use of Your Capital Investments
Issue #420, May 30, 2016

The Fed’s Announcement
Issue #419, May 23, 2016

Quit While You’re Ahead: A True Story
Issue #418, May 16, 2016

The Precious Metals
Issue #417, May 09, 2016

Negative Secular Trends: Part Ii of II
Issue #416, May 02, 2016

Negative Secular Trends: Part I of II
Issue #415, April 25, 2016

Not Winning is not the same as not Losing
Issue #414, April 19, 2016

Behavioral Economics: Part II: Weaknesses
Issue #413, April 11, 2016

Behavioral Economics: Part I: Valid Points
Issue #412, April 04, 2016

The Most Important Books I’ve Read
Issue #411, March 28, 2016

Secret to Success: Take Risks and do Things Differently
Issue #410, March 21, 2016

The Over-Priced Food Presentation Hustle
Issue #409, March 14, 2016

The War on Cash
Issue #408, March 07, 2016

Precious Metals: Don’t Jump in Yet
Issue #407, February 29, 2016

The Bear is Growling
Issue #406, February 22, 2016

The Importance of Showing Respect
Issue #405, February 15, 2016

The 80-20 Rule of Thumb Pareto Principle
Issue #404, February 08, 2016

Some Tips on Commercial Real Estate
Issue #403, February 01, 2016

Economic Outlook for 2016
Issue #402, January 25, 2016

Selling Short: Part II of II
Issue #401, January 18, 2016

Short-Selling. Part I. How it Works
Issue #400, January 11, 2016

Who Can You Trust, and How to Spot a Con Man
Issue #399, January 04, 2016

Outlook for 2016: Part II of II
Issue #398, December 28, 2015

My Outlook for 2016, Part I of II
Issue #397, December 21, 2015

Want to Live a Long Time?
Issue #396, December 14, 2015

Some Tips on Retirement
Issue #395, December 04, 2015

Negative Interest Rates
Issue #394, November 30, 2015

What if the US Dollar Breaks to New Highs
Issue #393, November 23, 2015

How to Decrease Student Debt by 25%
Issue #392, November 16, 2015

The Importance of Buying Life Insurance when you are Young
Issue #391, November 09, 2015

Barron’s Conference, Part II of II
Issue #390, November 02, 2015

THE PHYSICIAN INVESTOR NEWSLETTER

HELPING PHYSICIANS ATTAIN FINANCIAL SECURITY
By Robert M. Doroghazi, M.D., F.A.C.C.

The New DOJ Fiduciary Rule

Issue #443, November 07, 2016

    A subscriber asked me to write on this subject. I had this article mostly written but was fortunate enough for there to be a nice Op/Ed piece in Wednesday’s (11/2/16) Wall Street Journal on the subject, so I will also borrow from that.
    In April the Dept. of Labor issued a fiduciary rule requiring those handling retirement accounts to move to a fee-based compensation model, or sign a “Best Interest Contract Exemption (BICE)” if they wish to continue receiving variable compensation. The advisors can receive only “reasonable compensation”. If a client feels their advisor has not acted in their “best interests”, they can file a class action law suit.
    Let’s start with the basics. Webster’s defines fiduciary as “of, relating to, or involving a confidence or trust”. Fiduciary sounds apple-pie American, touchy-feely good, but I believe these new regulations will not work out well.
    What will be the results? The WSJ article lists:
    1) it will push investors into passive index funds.
    RMD comment: Studies show that index funds outperform actively managed funds over time, so, in part, this is fine. Likewise, there are times that sector funds or individual stock positions are indicated. Ex: if you believe we are in a bull market in the precious metals, you would buy GDX (an ETF of mining stocks). Or 10 years ago the only store in the local mall with customers was Apple, so you bought AAPL (as cousin Tony did). The new rules discourage the use of judgment. As we know from being physicians, there are times to follow the rules, and times to use judgment.
    2) It will cost investors money. Morningstar notes that fee-based account can cost up to 60% more than commission-based accounts. Ex: say you have $1M. 1% = $10,000 per year. But in a commission-based account, say there is a minimum fee of $100 to have the account, and you make only 10 trades per year at $20 per trade = $200. $300 total.
    3) Hurt smaller investment advisors. Like all regulations, the large companies can more easily absorb the cost of compliance. The rule is 1,023 pages long.
    4) Hurt small savers. The increased threat of litigation on commission-based accounts will cause advisors to switch to fee-based accounts, which can be un-economical for small accounts. Ex: say that the fee is 1% of assets, but with a minimum fee of $100. An individual just starting out may have an account of $1,000. $100 is a 10% fee. 
    So here’s what I see as the 2 main issues:
    What should you do?
    RMD comment: from my reading, nothing. Your investment advisor will contact you if any changes are required in your account. If you are happy with your investment advisor (if you’re not, why haven’t you already changed?), just stick with them.
    What was the reason(s) for the new regulations? Were investors in trouble?
    RMD comment: Now we are talking. One would think that new regulations regarding investing in stocks should come from the Securities and Exchange Commission. Nope. Or maybe, even better, Congress? Nope. The Federal Reserve? Nope. The Treasury Dept.? Nope. An independent policy board such as the one that recommends GAAP (Generally Accepted Accounting Principles)? Nope.
    It was the Department of Labor. I would make a direct analogy to the Affordable Care Act. These new rules sound like they are set up to help the little guy, but the results will be the same as ObamaCare: more unnecessary government interference and regulation, more expense, and in this case, a lot more lawsuits. The trial lawyers could hardly ask for more. In short order, any loss will be blamed on the advisor because they were not in the client’s “best interests”.
                                                                    RMD      
    This is from a new subscriber. “Your newsletter allows me to focus on topics that are not part of my daily responsibilities. Your insight is admirable.”
    RMD comment: I have noted from the beginning of my writing that I cannot evaluate an individual stock as well as Barron’s, or that I have the resources of the Wall Street Journal. Rather, I give my opinion on topics of importance, such a today’s newsletter, or discuss issues you won’t see elsewhere, like “A Wedding as an Investment” or “What is Your Spare Time Worth”. I also continually remind you of the basics: work hard, save your money, and stay out of debt.
    It’s important to hear different opinions. As (I believe) Mark Twain said “You never learned anything from listening to yourself talk”. 
    The Deeds of Trust (mortgages on real estate) are published in the Saturday Business Supplement in the Columbia Daily Tribune. It breaks my heart to see physicians in their 50s and 60s (and even 70s) with mortgages of $300-500K (the average home in Columbia sells for $210K), or docs in their 30s and 40s with mortgages of $600-800K. 
    RMD comment: there is never a better investment than the early repayment of debt.    Your goal should be to have your mortgage paid off and be debt free by age 45. My dad, a foreman at General Steel, paid an extra $50 per month and had the mortgage paid off at age 42 in 1959. I remember shaking his hand.
  I have yet to see a physician that subscribes to this newsletter with an out-sized mortgage. Work hard, save your money, and stay out of debt.
    In 2012, I paid cash for a 750 BMW with the goal that I will never have to buy another sedan. The maintenance plan just expired, so the routine oil change and lube and air filter was $225 (RMD comment: ouch!).
    The man also said I need new tires = about $1,800. I have only 26,700 miles on the car, and the tires don’t look that worn to me, so I asked a Rotary buddy and long-time subscriber who owned a tire store for many years his opinion. He said new tires have10-11/32s inches of tread (If you knew that, I’m really impressed), and tires are considered worn out at 2/32s on the tread gage. He’s going to do a “house call” when he gets back into town to check things out.
    RMD comment: 1) successful people know as much about their profession as you know about Medicine. 2) If something doesn’t seem right, question it. 3) Don’t be afraid to ask other’s opinions, it’s not a sign of weakness. 4) one of the really great things about living in one place for a long time is that when I have a question about almost anything: plumbing, insurance, real estate, electrical work, tires, getting a suit tailored: I know someone I trust who I can give a call.
    I played in the Heartland Poker Tour Senior’s (50 and older) Tournament at the Ameristar Casino in St. Louis on Tuesday. 320 entrants: they paid 36 places: I finished 31st.I had pocket Aces twice: tripled up once, doubled up the other time.
    Possibly the most important hand is one I read wrong! I thought I had nothing so didn’t bet. Actually I had a King-high flush. The other guy had a full house: Kings full of Queens. I would have lost a lot of chips. A negative times a negative is a positive.
    RMD comment: People say “Isn’t it fun to play”? I say “the fun is winning”.
    It’s important to admit things to yourself. I realize that I’m no longer competitive in the general poker tournaments, but I am very competitive in the Senior’s events. The brutal truth is that the mind and body peak at age 25-27. How many 65 year olds do you see in the NBA or NFL?
    You have to take chances to win in poker. There are several times I had to tell myself “You don’t win playing scared poker”.     
    It’s not often I come across a word I’ve never seen before:
    Vernissage: (it’s not even in my 7th Ed. Webster’s Collegiate Dictionary. I had to look it up on-line): (Webster’s) a private showing or preview of an art exhibition.
    Two quotes:
    1) a Russian proverb.
    Go to war—pray once.
    Go to sea—pray twice.
    Get married—pray 3 times.
    2) “I do what the voices in my wife’s head tell me to do”.
    Diane and I are traveling so next week’s newsletter won’t come out until Monday, or more likely Tuesday. The topic will be “Negative Secular Trends in Medicine: The Suits aren’t Makin’ Steel”. You will love it.   

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