Surgery News - September 2007 - (Page 19) SEPTEMBER 2007 • SURGERY NEWS FINANCE COVERING YOUR ASSETS Rebalancing Tips for Financial Success “Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble to give way to hope, fear and greed.” —Benjamin Graham sset allocation and diversification, two of the three important tenets of successful portfolio management, were covered in previous issues of SURGERY NEWS (”Allocation Tips for Financial Success,” July 2007, p. 23 and “Diversification Tips for Financial Success,” Aug. 2007, p. 19). Once you have determined the right target asset allocation, and then reduced risk by diversifying your assets, you must maintain low risk by periodically rebalancing your portfolio. Many surgeon-investors find this third portfolio management task the most difficult one. Those who base their decisions on emotions, rumors, or even tips at BY CHARLES D. the scrub sink MABRY, M.D., FACS often end up losing money. Despite the predictable losses, they usually continue with the same behavior and get the same poor results. Markets fluctuate, and humans are often irrational. But periodically rebalancing your portfolio allows you to capitalize upon that fluctuation and still avoid risk. Suppose you have chosen a typical blend of 60% stocks, 35% bonds, and 5% in a money market fund to save for retirement 20 years from now. The equity market is on a roll, bonds are in a slump, and a year later the overall portfolio allocation has changed to 70% stocks, 25% bonds, and 5% money market allocation. Should you keep your “winners” by keeping the stock percentage high and hope that the market keeps on going? Probably not. Remember, the reason you originally chose the stock/bond percentage was to have the growth potential of stocks, yet balance some of their risk by adding lower-risk bonds to produce income along with the small portion of your money that’s anchored in a very safe money market fund. How do you rebalance? Sell enough stocks to reduce them to 65% of your portfolio, and reinvest the money into bonds to increase their percentage to 35%. By doing so, you avoid the temptation to bet that stocks will continue to rise forever and to neglect bonds that have been down for the year. By rebalancing, you force yourself to sell high and buy low. You have sold off some of your high-priced equities and bought bonds when they are “on sale.” You still have most of your equities and therefore can still gain if the market goes up, but by increasing bond holdings to a safer level, you reduce your risk if the market tanks and equity values fall. Rebalancing also should be used to adjust asset subclasses, such as large and small cap stocks, or domestic vs. foreign equities, to maintain their target allocations. How often should you rebalance? The longer you wait, the more your assets may deviate from their targets. However, rebalancing too frequently may be just as bad, in that there are transaction costs to consider and you tend to sell better-performing assets too soon in a given market cycle. Most experts recommend rebalancing (or at least reassessing your assets) at least annually. To make it easy to remember, you might tie it in with the end of your financial year, or perhaps with your birthday. Changes in employment, family status, or financial circumstances also call for a portfolio review, because you may need to change your original allocation assumptions. You should review your portfolio whenever major life events occur. Don’t fall prey to greed, fear, or the tendency to follow rumors. Asset allocation, diversification, and periodic rebalancing will help you avoid those pitfalls and ensure your long-term success. ■ DR. MABRY serves on the finance committee and investment subcommittee of the ACS Board of Regents and is the series editor for the ACS Practice Management Course for Residents and Young Surgeons. TYGACIL® (tigecycline) Brief Summary See package insert for full Prescribing Information. For further product information and current package insert, please visit www.wyeth.com or call our medical communications department toll-free at 1-800-934-5556. CONTRAINDICATIONS TYGACIL is contraindicated for use in patients who have known hypersensitivity to tigecycline. WARNINGS Anaphylaxis/anaphylactoid reactions have been reported with nearly all antibacterial agents, including tigecycline, and may be life-threatening. Glycylcycline class antibiotics are structurally similar to tetracycline class antibiotics and may have similar adverse effects. TYGACIL should be administered with caution in patients with known hypersensitivity to tetracycline class antibiotics. TYGACIL may cause fetal harm when administered to a pregnant woman. If the patient becomes pregnant while taking tigecycline, the patient should be apprised of the potential hazard to the fetus. Results of animal studies indicate that tigecycline crosses the placenta and is found in fetal tissues. Decreased fetal weights in rats and rabbits (with associated delays in ossification) and fetal loss in rabbits have been observed with tigecycline. (See PRECAUTIONS, Pregnancy.) The use of TYGACIL during tooth development (last half of pregnancy, infancy, and childhood to the age of 8 years) may cause permanent discoloration of the teeth (yellow-gray-brown). Results of studies in rats with TYGACIL have shown bone discoloration. TYGACIL should not be used during tooth development unless other drugs are not likely to be effective or are contraindicated. Clostridium difficile associated diarrhea (CDAD) has been reported with use of nearly all antibacterial agents, including TYGACIL, and may range in severity from mild diarrhea to fatal colitis. Treatment with antibacterial agents alters the normal flora of the colon leading to overgrowth of C. difficile. C. difficile produces toxins A and B which contribute to the development of CDAD. Hypertoxin producing strains of C. difficile cause increased morbidity and mortality, as these infections can be refractory to antimicrobial therapy and may require colectomy. CDAD must be considered in all patients who present with diarrhea following antibiotic use. Careful medical history is necessary since CDAD has been reported to occur over two months after the administration of antibacterial agents. If CDAD is suspected or confirmed, ongoing antibiotic use not directed against C. difficile may need to be discontinued. Appropriate fluid and electrolyte management, protein supplementation, antibiotic treatment of C. difficile, and surgical evaluation should be instituted as clinically indicated. PRECAUTIONS General Caution should be exercised when considering TYGACIL monotherapy in patients with complicated intra-abdominal infections (cIAI) secondary to clinically apparent intestinal perforation. (See ADVERSE REACTIONS.) In Phase 3 cIAI studies (n=1642), 6 patients treated with TYGACIL and 2 patients treated with imipenem/cilastatin presented with intestinal perforations and developed sepsis/septic shock. The 6 patients treated with TYGACIL had higher APACHE II scores (median = 13) vs the 2 patients treated with imipenem/cilastatin (APACHE II scores = 4 and 6). Due to differences in baseline APACHE II scores between treatment groups and small overall numbers, the relationship of this outcome to treatment cannot be established. Glycylcycline class antibiotics are structurally similar to tetracycline class antibiotics and may have similar adverse effects. Such effects may include: photosensitivity, pseudotumor cerebri, and anti-anabolic action (which has led to increased BUN, azotemia, acidosis, and hyperphosphatemia). As with tetracyclines, pancreatitis has been reported with the use of TYGACIL. As with other antibacterial drugs, use of TYGACIL may result in overgrowth of non-susceptible organisms, including fungi. Patients should be carefully monitored during therapy. If superinfection occurs, appropriate measures should be taken. Prescribing TYGACIL in the absence of a proven or strongly suspected bacterial infection is unlikely to provide benefit to the patient and increases the risk of the development of drug-resistant bacteria. Information for Patients Patients should be counseled that antibacterial drugs including TYGACIL should only be used to treat bacterial infections. They do not treat viral infections (e.g., the common cold). When TYGACIL is prescribed to treat a bacterial infection, patients should be told that although it is common to feel better early in the course of therapy, the medication should be taken exactly as directed. Skipping doses or not completing the full course of therapy may (1) decrease the effectiveness of the immediate treatment and (2) increase the likelihood that bacteria will develop resistance and will not be treatable by TYGACIL or other antibacterial drugs in the future. Diarrhea is a common problem caused by antibiotics which usually ends when the antibiotic is discontinued. Sometimes after starting treatment with antibiotics, patients can develop watery and bloody stools (with or without stomach cramps and fever) even as late as two or more months after having taken the last dose of the antibiotic. If this occurs, patients should contact their physician as soon as possible. Drug Interactions Prothrombin time or other suitable anticoagulation test should be monitored if tigecycline is administered with warfarin. (See CLINICAL PHARMACOLOGY, Drug-drug Interactions in full prescribing information.) Concurrent use of antibacterial drugs with oral contraceptives may render oral contraceptives less effective. Drug/Laboratory Test Interactions There are no reported drug-laboratory test interactions. Carcinogenesis, Mutagenesis, Impairment of Fertility Lifetime studies in animals have not been performed to evaluate the carcinogenic potential of tigecycline. No mutagenic or clastogenic potential was http://www.wyeth.com http://www.wyeth.com
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