Dental Marketing and Practice Management

Three ways to make money in the current economic pit of despair. For over 20 years, we’ve worked with dentists, one-on-one, on both the practiceand the personal financial side. My wife Suzanne is a personal financial genius, and she has the merit badges to prove it.

This is not rocket science. It’s solely based on over 20 years of financial planning advice she has given to dentists, many of whom are now fat and happily retired. Mixed with that is my 40 years of personal experience watching economic cycles.

Let’s be clear: These are just my own thoughts and opinions, not guaranteed financial advice. In other words, take all this with grain of salt.

First money maker: Buy stocks at below 8,500 on the Dow. The market has been testing bottom for the last two weeks. Every time it approaches or hits 8,000, it bounces up as the “Professionals” buy in. It is impossible to time a market buy at the very bottom. Don’t worry about it. Just be prepared to hold the stocks for at least threeto five years.

Will the market go lower than 8,000? Quite possibly. So what? The market will rebound… eventually. This economic situation is not a 9/11 event. It is a media-driven panic that is the result of a too-complex set of financial interactions. The real problem is that no one in government understands or has the intellectual capability to regulate it a meaningful way. But I digress…

Second money maker: If you absolutely need cash for immediate needs, cash that is currently tied up in a losing stock portfolio (think kids’ college education costs), don’t panic: there may be a significant market bounce immediately following the presidential election. This has happened before, with reasonable consistency.

It makes no difference who wins. Neither candidate will have any power over the economy. But hope springs eternal in America’s cultural heart.

If this scenario comes to be, don’t expect to be made whole. If your back is really against the wall, half a loaf is just fine. Sell the biggest gainers at a Dow of 10,000… if such a blessing should come to pass.

Third money maker: Buy gold and/or silver. Do not exceed 10% of your investment portfolio. Gold has dropped over $200 an ounce in the last few weeks. It is a relatively good buy. Gold coins are in extremely short supply. Gold bars are still available.

Silver is currently undervalued. It is also hard to store. Think big and heavy.

Why am I saying this? Just one word – INFLATION! Remember the 1980's under Jimmy Carter? His Nobel Prize was not for economics. The government admitted to 12-14% annual inflation. Real inflation was closer to 18-20%!

Let's start counting up government spending:

1. A $50 billion economic stimulus package earlier this year. I’m still waiting for my tax refund check.
2. A $700 billion Wall Street and banking bailout, plus another $150 billion in earmarks to bribe the appropriate congressmen.
3. A second $300 billion is now in the works for immediate passage after the election.

Where did this Trillion-Plus Dollars come from? Government printing presses. We are already at an annualized inflation rate of 4.9% for this year. In about 18 months, these chickens will be fully hatched and running.

Gold reached $900 in the 80’s under Jimmy C. It has an inflation-adjusted value today of close to $2,000. However, it is still trading in a range of $730 to $950. Are you getting the picture?

Next week I will start to discuss how all of this will affect your dental practice. In the meantime, feel free to comment on this in the blog. However, don’t expect me to be answering questions or arguing points. The market is at 8,378 as I write this. I’m going to be buying stocks that have fallen below their corporate liquidation value.

Oh! And there’s one more small reason to buy metals. If there should be a major international incident (like the Israelis taking out Iran’s nuke program), gold and silver will spike. Sell gold at anything approaching $1,000. Don’t get greedy and try to time the high point. Sell and buy back when it readjusts to the 700’s. See you next week.