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Many people believe that mutual funds are simply the best way to invest for the long term. That's what all the advertisements say, right? They are diversified, relatively safe, and have professional management. For some people,

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

investing in mutual funds makes a lot of sense. People who should invest in mutual funds know that the stock market is a great way to create lasting wealth, but they don't want to make the effort to learn to invest correctly.

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

These people are not "too dumb", or "don't have time", or whatever excuse they make. There is nothing wrong with someone like this, they just make it a lot more difficult to create wealth for themselves. Investing is a continual

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

learning process. There is no magic formula or special degree required to be a great investor. The only requirement is desire. Anyone can have that. For those who don't want to make the effort to understand how the market works

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

, hand your money to a pro. They will charge you outrageous fees, but at least you might be able to sleep at night.

Fees

The main reason you want to avoid mutual funds, if you choose to make the effort, is fees. "Manag

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

ement fees" and "loads" will rob you of potential returns. Here's how:

Without Mutual Funds

Mary buys 100 shares of XYZ company. She pays her broker $10 to execute the trade. The shares were at $10 per share whe

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

n she bought the company. Her total investment was $1000. She owns the stock for 5 years and it goes to $50 per share. Her investment is now worth $5000 and she has a profit of $4000. Mary decides to sell her shares. She pays h

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

er broker another $10 for the trade.

Total Costs $20. Total account value after 5 years $4980.

With Mutual Funds

Joe buys shares of a mutual fund at $10 per share. He pays $10 to execute the trade. The mutua

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

l fund management fee is 1.5% per year. At the end of the first year, the fund has gone from $10 to $20 per share. Joe pays $30 ($2000 new account value x 1.5% management fees) Not only has he paid a fee, but that $30 he paid h

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

as no opportunity to compound. Instead of being worth $2000, Joe's mutual fund is now worth $1970. If you use that math for the remaining 4 years, Joe's account value ends up at $4617. He paid $194.63 in fees and lost an additi

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

onal $188.37 in potential returns. Oh yeah, he also paid another $10 to sell. Total Costs $214.63. Lost Returns $188.37. Total account value after 5 years $4607.

If you take that scenario and stretch it out to 10 years, t

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

he results are even more dramatic. Why? Because as Joe's account grows in value, the fund takes more and more in fees! The management fee percentage does not change. Management is taking the same size piece of a larger pie. How

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

do you think they pay for all the advertising? Mary will only pay the fees to execute the trades.

Performance

Most mutual funds fail to beat the market in a given year. In fact, 75% of actively managed funds fail to bea

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

t the market in a given year. This means that 75% of the time, you would get better returns by investing in a passively managed index fund than investing in an actively managed mutual fund. As an individual investor, you can be

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

at the market in most years. If you don't, at least you aren't paying huge fees to someone on top of not beating the market.

It's Not Their Fault

Why do mutual fund managers lag the market most years? Because of the nature

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

of their job. They have to make most of the investment mistakes you aren't supposed to make. They have a compressed time frame for their fund to perform. They can advertise all they want, the bottom line is that performance at

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

tracts more money and more fees for the fund. If the fund manager was buying stocks when they are truly cheap and telling the fund holders to be patient, they would pull their money out. The fund would then lose money and the m

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

anager would lose his or her job.

Wall Street professionals in general have so many pressures around them that it is difficult to ever be a great performer. Is it any wonder that Warren Buffett, the greatest investor who ever

.

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

lived is based in Omaha, Nebraska? Next time read about all those analysts who make stocks move with their recommendations and how you can profit from it.

If you want to pay huge fees for poor performance, then mutual funds are

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

your best bet. If you want to beat the market and not pay anyone else to do it, make the effort to learn and invest for yourself. Good information is out there you just need to find it. Check out the links below for more info.

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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Cutting your prices in the sales industry is common practice, yet completely unneccessary. Stick to your guns if you want your business to remain profitable.

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