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Top Articles - Investing - Don't Scramble Your Eggs
Financial advisors have been preaching the use of portfolio diversification to reduce risk for years. Unfortunately, the way most do it leaves your portfolio vulnerable! Read on to find out how to properly divers
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
ify your portfolio.
We’ve all heard that it’s not wise to put all of your eggs in one basket. For safety, we are told that it is better to divide our eggs among several baskets because if one gets dropped it isn
We’ve all heard that it’s not wise to put all of your eggs in one basket. For safety, we are told that it is better to divide our eggs among several baskets because if one gets dropped it isn
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
t going to break all our eggs. Wall Street refers to this as diversification.
Many people think that if they own more than one investment that they are diversified. Others think that diversifying means that they
Many people think that if they own more than one investment that they are diversified. Others think that diversifying means that they
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
should not keep all of their money with one institution or the same advisor. This isn’t diversification.
The egg analogy doesn’t accurately reflect the underlying reasons for diversification. There are many dif
The egg analogy doesn’t accurately reflect the underlying reasons for diversification. There are many dif
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
erent risks we face. There is market risk, interest rate risk, credit risk and inflation risk, just to name a few. The purpose of diversification is to help you reduce your exposure to all of these risks, not jus
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
t one or two of them.
There’s no such thing as the Perfect Investment. EVERY investment has risks and rewards. Combining investments with different risks and rewards can result in the reward of one offsetting th
There’s no such thing as the Perfect Investment. EVERY investment has risks and rewards. Combining investments with different risks and rewards can result in the reward of one offsetting th
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
risk of another.
Here’s a simplified example. Many retirees recognize that there is greater risk of losing their principal when investing in the stock market then there is in a Certificate of Deposit (CD). As a
Here’s a simplified example. Many retirees recognize that there is greater risk of losing their principal when investing in the stock market then there is in a Certificate of Deposit (CD). As a
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
result, many choose to avoid the stock market all together.
Neither CDs nor a stock market investment are perfect. The reward of CDs is their stability. But they aren’t designed to protect you from inflation ri
Neither CDs nor a stock market investment are perfect. The reward of CDs is their stability. But they aren’t designed to protect you from inflation ri
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
k. A stock market-based investment is designed to protect you from inflation risk but it lacks the stability of the CD.
That’s where diversification helps. Spreading your money among both CDs and stock market-ba
That’s where diversification helps. Spreading your money among both CDs and stock market-ba
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
sed investments is a way to reduce the risks associated with each. Doing so reduces the overall risk of your portfolio and increases the probability that you will achieve your goals.
Spreading your portfolio bet
Spreading your portfolio bet
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
een CDs and stocks won’t adequately protect you from all the risks you face. Portfolios should be divided among cash, bonds, real-estate and equities, further sub-divided into different classes and then the class
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
s into different investments. Many advisors do this but that’s where they stop…and fail.
Most advisors fail to properly diversify a portfolio by strategy. If your entire portfolio is based on the same strategy t
Most advisors fail to properly diversify a portfolio by strategy. If your entire portfolio is based on the same strategy t
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
hen your entire portfolio is exposed to the risks associated with that strategy.
Probably 98 out of 100 advisors will tell you that the Buy and Hold strategy is the only successful way to invest in the stock mar
Probably 98 out of 100 advisors will tell you that the Buy and Hold strategy is the only successful way to invest in the stock mar
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
et. Doing so puts YOU at risk. That’s why so many investors suffered losses of 30-50% or more between 2000 and 2002. The problem wasn’t the type of investment, the problem was the advisor failed to diversify your
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
portfolio by strategy.
There are many different strategies available. I’m not sold out to any single strategy. Just like investments, each strategy has strengths and weaknesses. That’s why I diversify clients b
There are many different strategies available. I’m not sold out to any single strategy. Just like investments, each strategy has strengths and weaknesses. That’s why I diversify clients b
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
tween different types of investments AND different underlying strategies.
I’ll use a Buy and Hold strategy, but I will offset its risks with a proprietary strategy designed to significantly reduce stock market l
I’ll use a Buy and Hold strategy, but I will offset its risks with a proprietary strategy designed to significantly reduce stock market l
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
osses. I use traditional investments but I also find other ways to meet my client’s needs. I develop different strategies to meet different needs—diversifying along the way.
For instance, one of my high-income s
For instance, one of my high-income s
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
rategies uses a type of investment unfamiliar to most advisors (because they can’t earn a commission on them). To reduce risk, it’s diversified among 20 individual investments. Three of them lost money in 2005—on
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
e lost 29%! The other 17 more thn made up for that, though, with 7 having gains over 40% each. As good as this strategy is, I’ll only use it for a portion of a portfolio.
Diversification can be used to reduce th
Diversification can be used to reduce th
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
specific risks your portfolio faces. Use different categories, classes and individual investments. And make sure that you use more than one strategy. Doing so will help you protect what you have and make it grow
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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