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Ashford Advisors Creative Wealth Maximization Strategies - March 2011

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This month's newsletter features the following articles:

Getting Slapped by the “Fat Tail”

People aren’t rational. That’s the basic conclusion of all sorts of studies in behavioral finance, a discipline which tries to understand what motivates and determines peoples’ financial decisions. But, in an ironic twist, it also appears that one of the factors in poor decision-making may be an over-reliance on logic and science. Some events may have an outsized impact on our financial lives, even though the probability of their occurrence is quite low. An important part of effective risk management is recognizing – and preparing for – the impact of the unexpected.

Increased Saving:
An Economic Stimulus Plan That Moves the ‘ANIMAL SPIRITS’

“Animal spirits” refers to a phrase first used in the 1930s by economist John Maynard Keynes to describe the economic confidence that prompts people to spend money. For Keynesian economists, this is one of the justifications for using governments to provide economic stimulus packages. A recent uptick in real estate sales has some economists declaring the imminent revival of these animal spirits. But this resurgence has nothing to do with governmental and institutional policies. In fact, just the opposite: Banks and government agencies, through higher down payments and tighter lending standards, are making it harder to buy a home. The “stimulus” is coming from individuals with cash savings.

Ignorant Certainty:

(“I know I don’t like it, even though I don’t know what it is”)

French essayist Michel de Montaigne “Nothing is so firmly believed as what is least known.” Although Montaigne’s comments are more than four centuries old, they still apply today – especially when the topic is cash value life insurance.

Given its 150-year history, it would seem that cash value life insurance would by now be a well-understood financial product. Yet a quick survey reveals many financial commentators have a strong distrust and outright animosity toward cash value life insurance. Why? Some of the problem is simply financial ignorance, and the tendency to denigrate what is not easily understood. Yet cash value life insurance is the logical integration of several sound financial concepts.

Re-shuffling the Reverse Mortgage

Some changes in the reverse mortgage market may make it easier for seniors to access their home equity, but also protects lenders from declining values in the real estate market.

DID YOU KNOW?...

Some interesting factoids on the historical background of life insurance.

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Ashford Advisors Creative Wealth Maximization Strategies - March 2011

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* Registered Representative of Park Avenue Securities LLC (PAS), Two Ravinia Drive, Suite 750, Atlanta, GA 30346. Securities products and services offered through PAS, (770) 390-2600. Financial Representative, The Guardian Life Insurance Company of America (Guardian), New York, NY. PAS is an indirect, wholly owned subsidiary of Guardian. Ashford Advisors is not an affiliate or subsidiary of PAS or Guardian.
PAS is a member FINRA, SIPC.

** Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS), Two Ravinia Drive, Suite 750, Atlanta, GA 30346. Securities products/services and adv isory services are offered through PAS, a registered broker-dealer and investment advisor, (770) 390-2600. Financial Representative, The Guardian Life Insurance Company of America (Guardian), New York, NY. PAS is an indirect, wholly owned subsidiary of Guardian. Ashford Advisors is not an affiliate or subsidiary of PAS or Guardian.
PAS is a member FINRA, SIPC.

Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal or investment advice. Although the information has been gathered from sources believed reliable, please note that individual situations can vary, therefore the information should be relied upon when coordinated with individual professional advice.

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