EDITORIAL JOURNAL OF THE MASSACHUSETTS DENTAL SIMPLE TRUTHS SOCIETY E WRITE THESE WORDS AS OUR GOVERNMENT AND CITIZENS BATTLE (SOMETIMES LITERALLY) EDITOR Wover health care reform and as our state and nation have lost two Kennedy sib- David B. Becker, DMD lings, one the longtime “Lion of the Senate” and the other the founder of the Special ASSISTANT EDITOR Olympics Program. Arthur I. Schwartz, DMD Since 1968, the Special Olympics has raised the quality of life and self-esteem of EDITOR EMERITUS countless people with special needs. Eunice Kennedy Shriver also understood the ben- Norman Becker, DDS efi ts of good oral health. She paved the way for dentistry to be a part of the Special Olympics competitions, opening doors to dental care to a truly underserved popula- MANAGING EDITOR OF tion, many of whom had never received even rudimentary dental evaluation. One of PUBLICATIONS AND WEB SITE our own members, Dr. Steve Perlman, spearheaded this effort, which has grown to Melissa Carman worldwide dimensions and brought higher respect to all of us as a profession. MANAGER, GRAPHIC DESIGN Senator Edward M. Kennedy was a champion for public health causes. Ironically, Jeanne M. Burdette while it often seemed popular among our peers to oppose anything he said, far more GRAPHIC DESIGNER often than not he fought for many of the same causes we, as a profession, also sought. Shelley Padgett Ted Kennedy and Eunice Kennedy Shriver were people of privilege who used their inherited advantages and natural talents to do what they could to improve the world around them. Whether or not we agree with all that they did, it cannot be argued that Editorial Board they left the world a better place. Bruce Donoff, DMD, MD However, this is not meant to be a political treatise. Your editors recently lost a mutual friend who was also one of our colleagues. He, like all of us, strived to provide Robert Faiella, DMD the best care that he could to the people who entrusted their oral health to him. He was Russell Giordano, DMD a consummate clinician. He, like any of us, was not perfect. He lived with the day-to- day challenges we all face. His passing, all too sudden, all too soon, is a reminder that Shepard Goldstein, DMD we, as professionals, as family members, as citizens, and as friends, do not have infi nite Stephen McKenna, DMD time to accomplish all we hope to do in any of the facets of our lives. John McManama, DDS By the time you read this, national health care reform may be an accomplishment, Noshir Mehta, DMD a quagmire, or a total failure. No matter where we stand in the progress of any of the multitude of public efforts to improve the health of our society, some simple truths Charles Millstein, DMD remain. Philip Millstein, DMD Our time allotment to accomplish our goals is unknown. Maria Papageorge, DMD We are given the expectations of those who come to us for care to do our best to Michael Sheff, DMD restore and maintain health. Steven Tonelli, DMD Whether we are a senator, a philanthropist, or a dentist, we are obliged to try to leave the world a better place. Copyright © 2009 Massachusetts Dental Society Our friend did. issn: 0025-4800 The JOURNAL OF THE MASSACHUSETTS DENTAL Let’s hope that in the very distant future, the same is said for each of us. SOCIETY [usps 284-680] is owned and published quarterly by the Massachusetts Dental Society, Our lives, individually and collectively, are precious. What really matters is how we Two Willow Street, Suite 200, Southborough, live the life each of us is given, and what we do to leave the world a better place. MA 01745-1027. Subscription for nonmembers is $15 a year in the United States. Periodicals postage paid at Southborough, MA, and additional mailing offi ces. Postmaster: Send address changes to: Journal of the Massachusetts Dental Society, Two Willow Street, Suite 200, Southborough, MA 01745. Contributions: Contact the Communications Department, or visit www.massdental.org for author’s guidelines. Display ad closing dates: February 1, May 1, August 1, November 1. For more information, contact Rachel Marks, Exhibits Coordinator, at (508) 480-9797, ext. 259, or email [email protected]. Member Publication American Association of Dental Editors 4 Journal of the Massachusetts Dental Society FINANCIAL SERVICES CORNER Securities offered through NEXT Financial Group, Inc., Member FINRA/SIPC. EDFS is not an affi liate of NEXT Financial Group, Inc. EDFS/Eastern Dental Financial Services, LLC, 200 Friberg Parkway, Suite 2002, Westborough, MA 01581. Phone: (800) 898-3342. Fax: (508) 870-2897. Copyright 2009 Forefi eld Inc. All Rights Reserved. INVESTING IN A LOW-INTEREST-RATE ENVIRONMENT OW INTEREST RATES CREATE A DILEMMA: DO YOU ACCEPT A LOW RE- Read the prospectus carefully before investing. If you prefer in- Lturn because you feel you must protect your principal, or do dividual stocks, keep an eye on trading costs. you take on greater investment risk in order to try for a higher return? In balancing these two concerns, there are some factors Think About Your Real Return to consider. Low interest rates may not be quite as problematic as they seem. Even if you’re earning a low interest rate, your real return might Laddering Your CDs not suffer too much if infl ation is also low. Real return represents When yields on Treasury bonds began dropping last year, many what your money earns once the impact of infl ation is taken into investors were attracted to certifi cates of deposit (CDs) offered account. With an annual infl ation rate of 0.1 percent—the De- by banks that needed to attract capital. However, interest rates cember 2008 Consumer Price Index fi gure—a bond that pays won’t stay low forever, and at some point you may want access 3 percent would produce the same real return as a bond that to your money before a CD matures. One way to achieve higher pays 5 percent when annual infl ation is running at 2.1 percent. rates while retaining fl exibility to adjust your strategy over time is to ladder CDs. Laddering involves Compare Interest Rate investing in CDs with varying matu- and Yield Spreads rity dates. As the shorter-term CDs When market instability drove many mature, you can reinvest in one with investors to the safety of Treasury a longer term and higher rate. Over bonds, their prices rose and yields time, laddering can give you both fell. As a result, the spreads between the higher rates typically offered by Treasury yields and those of corpo- longer-term CDs and the ability to ad- rates and municipals have been rela- just as interest rates change. tively high over the last year because For example, Susan wants to non-Treasury bonds have to offer invest $60,000 in CDs. She puts higher yields to compensate for inves- $20,000 in a six-month CD that pays tors’ anxiety about the safety of their 2.6 percent, another $20,000 in a principal and possibility of default. three-year CD that pays 3 percent, and the fi nal $20,000 in a fi ve-year CD that pays 3.5 percent. When the six-month CD ma- Consider Small Changes tures, she reinvests that money in another fi ve-year CD. When You may not need to remake your portfolio completely to seek her two-year CD matures, she reinvests it in still another fi ve- a higher return. For example, if you’re in Treasury bonds, you year CD. At that point, funds from a maturing CD will be avail- could move part of that money to municipal bonds, which may able roughly every other year, but will earn the higher fi ve-year involve greater risk of default but whose net returns are boosted rate. If rates are lower when a CD matures, she has the option of by their exemption from federal income tax. Or you could shift investing elsewhere. (This is a hypothetical example and doesn’t a portion of your stock allocation to dividend-oriented stocks represent the results of any specifi c investment.) and exchange-traded funds (ETFs), or preferred stock. Pay Attention to Expenses Look for Buying or Selling Opportunities Low returns magnify the impact of high investing expenses. Let’s Interest rates also can be used to help evaluate equities. Some say a mutual fund has an expense ratio of 1.00, meaning that analysts like to determine the relative value of the stock market 1 percent of its net asset value each year is used to pay operating using the so-called Fed market valuation model. (Though not expenses such as management and marketing fees. That 1 per- offi cially endorsed by the Federal Reserve Board, the method cent represents a bigger relative bite out of your return when the evolved based on a 1997 Fed report.) The model compares the fund is earning 3 percent than it does if it’s earning 10 percent. earnings yield on the S&P 500 to the 10-year Treasury bond’s At the higher number, you’re losing only about 10 percent of yield. If the S&P’s yield is higher than the T-bond’s, the model your return; at 3 percent, almost a third of your return goes to considers the market undervalued relative to bonds. If the Trea- expenses. Before investing in a mutual fund, carefully consider sury yield is higher, the market is overvalued. However, this is its fees and expenses as well as its investment objective and risks, only one of many valuation models and shouldn’t be the sole which can be found in the prospectus available from the fund.