The decision came after Morgan Stanley representative Charles Lincoln spoke to the group via conference call, following up on an in-person presentation made last month which outlined an extremely conservative plan for using the extra money. At Tuesday’s meeting, Lincoln responded to requests for a slightly more aggressive plan with a mixed approach which would have put 82 percent of the money in a zero coupon treasury bond while investing the remaining 18 percent – about $114,000 – in a diversified mutual fund portfolio that, while riskier, could yield higher returns. The treasury bond, meanwhile, would mature in May of 2025, returning $800,000 total and thus insulating the hospital from potentially losing the funds entirely, Lincoln said.
Board member John Hearnsberger spoke against portions of the proposal, expressing fears that a long-term bond would trap the hospital in a low-yield investment and prevent them from capitalizing on a potential future rise in interest rates. Hearnsberger’s fellow board members generally seemed to agree, and unanimously approved his motion to invest $650,000 in short term corporate bonds – a low-risk investment originally introduced during Lincoln’s first presentation – and $150,000 in the slightly riskier equities market through the vehicle of no load mutual funds. Additionally, Hearnsberger suggested the hospital set aside an unspecified monthly amount ranging from $10,000 to $25,000 to fund further investments.
The specific stocks the hospital’s funds will be used to purchase will be determined at the discretion of the firm they ultimately hire to broker the transactions. In addition to Lincoln, local Edward Jones representative Josh Tice has also been considered for the role, although no definitive decision was made Tuesday.