Money Buzz 06/03

Getting your hands on insider trading data; the benefits of medical savings accounts
Magazine Contributor
3 min read

This story appears in the June 2003 issue of Entrepreneur. Subscribe »

Inside Scoop
In today's volatile market, who doesn't want an inside track to stock-price gains? Now, investors have a better shot at getting one. While insiders once took as long as 30 days to make trades public, the average is now closer to 10 days, which means investors can keep tabs on when corporate execs and directors start dumping or gaining stock and get in on the action early enough to benefit from the inside scoop.

But the method isn't foolproof, says Jonathan Moreland, author of Profit From Legal Insider Trading: Invest Today on Tomorrow's News (Dearborn Financial Publishing) and the director of investment research newsletter "Insider trading data is an excellent first screen for investors, but people have to do research," he says. "For example, look for several insiders increasing their holdings rather than a single purchase by a CEO cheerleading his own firm."

Moreland also looks for a track record of buying and selling correctly. "There are insiders who have only purchased," he says. "If the stock came down and they didn't sell, you wonder if they're just cheerleading when the stock is down."

Healthy Choice
Having your own business has long meant choosing between two evils--paying prohibitive costs for a health-care plan or taking your chances with no coverage at all. To offset the high costs of coverage, some entrepreneurs employ Medical Savings Accounts (MSAs), which involve purchasing a high-deductible policy and using some of the premium savings to set up pretax savings accounts for the business owner and employees. Funds from the savings account can then be used to help meet the plan deductible. The advantage? Self-employed individuals or business owners and their employees can roll over any unused funds from year to year. Later, the remaining funds can be rolled into a retirement plan, earning pretax funds.

But this year, as health-care plan costs became 100 percent tax-deductible, MSAs offer less of an edge, particularly for sole proprietors, whose premiums will now be paid entirely with pretax dollars. "But for small employers, they're still a good idea, particularly if you want to be able to offer your employees more flexibility in terms of health-care choices," says Dean Hatfield, a regional practice leader with New York City-based human resources consulting firm Buck Consultants Inc. And, he adds, "with an MSA, you give employees [an] incentive to spend their health-care dollars wisely."

of community banks have a good or very good outlook about business in 2003.
SOURCE: Grant Thornton LLP

Unspent money on gift cards adds up to an estimated
a year.
SOURCE: Wall Street Journal

of small businesses that don't offer health insurance to workers say they might do so if federal tax credits were available to help pay for it.
SOURCE: Employee Benefit and Research Institute

Jennifer Pellet is a New York City-based freelance writer specializing in business and finance.

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