The Executive Board has approved a new investment policy for the AVMA, developed with the aid of Olcott Consulting Group of Wachovia Securities and the AVMA treasurer and staff.

For the purpose of managing investment risk and optimizing investment return, AVMA investable funds will be divided into three categories: operating, intermediate, and long-term.

Operating funds pay for day-to-day operations and the AVMA's short-term needs within a 12-month period. Intermediate funds cover known expenses within a three-year period and help pay for immediate, unanticipated expenditures that cannot be entirely met by operation funds. The purpose of the long-term fund is to help maintain the AVMA's long-term, overall financial stability.

The AVMA treasurer and staff will manage the operating and intermediate funds with recommendations from Olcott if needed. An investment manager will manage the long-term fund with recommendations from Olcott, and oversight by the AVMA treasurer and staff.

In addition, board members approved Treasurer James F. Peddie's recommendation to cap principal investment in the long-term fund at $8 million. "By investing over a longer period of time, market fluctuations and corrections will have a tendency to level out and provide an opportunity for better return investments," Dr. Peddie wrote in his recommendation.