A Physician's Perspective on Mutual Funds

Physician's Money Digest, August 2005, Volume 12, Issue 12

As a fellow physician-investor, Iunderstand that you want toput your hard-earned moneyto work. Mutual fund investingis a way to do that without having togo through the tedium of picking individualstocks or hiring a personal advisor. Itwas the method I chose in the mid-1980swhen my husband and I finally put awayenough money to invest. The funds I chosedid well. It was a good experience and onethat is appropriate for many physicians.

Investing Rookie

Forbes'

Physician's

Money Digest

As a young professional with moremoney to invest, I chose managed mutualfunds without a load. A load creates a dragon the portfolio because a chunk of moneycomes off the top before the investing dollarseven hit the portfolio pot. I also factoredin the fund's long-term history over aperiod of more than 20 years. Much of myinformation came from mutualfund charts. I only wish that was available back then.

There was also little information aboutinvesting in unmanaged mutual funds (ie,index funds). Some experts say the idealportfolio is a combination of managed andunmanaged funds. But it is more complicatedthan selecting a few no-load funds. Itrequires keeping track of where yourmoney is. The best way to do so is by usinga spreadsheet, but if you are not inclinedtoward lethal boredom, you should avoidundertaking this task yourself.

Source of Support

Fortunately, you can employ someoneelse to do this tedious work. By workingwith an advisor to look at criteria such asfund history, the record of the portfoliomanager, and the risk the fund took for itsreturn, you can find added value in yourinvestment strategy. In fact, it is a lot likeseeing a doctor, except advisors heal monetarywounds instead of physical ones.

I sympathize with a physician's financialapprehension. There often is littletime to gain financial sophistication andtoo many people willing to take advantageof someone with a lack of monetaryknowledge. Mutual funds that are regulatedby the government under theInvestment Company Act of 1940 helpsidestep that issue. In addition, they areconvenient and liquid. When chosencarefully, they can become part of thesolution rather than the problem.

Physician's Money

Digest

In this issue of the feature story provides an in-depthlook at fund investing. Be sure toread this article before taking your firststeps into the world of mutual funds.

is boarded in

neurology and psychiatry. She was a

practicing neurologist until 1995.

Since then, she has retrained and is

active in the investment and financial

planning area. Dr. Mueller is a senior

wealth advisor at Star Wealth Management in

Indianapolis, Ind. She welcomes questions or comments

at mymoneymd@aol.com.

Shirley M. Mueller