How To Buy Life Insurance

Cutting Through The Sales Literature, Marketing And Misinformation

Many people at some point in their lives come to the realization that if they were to unexpectedly die their families would be in serious financial difficulty.  Often this realization happens when you start having children or take on a major financial commitment, such as a large mortgage.  A natural response is to buy life insurance to protect themselves, but all too often people do not buy the right amount, don't buy the right kind, or don't buy it from the right provider.  There isn't a great deal in the way of common sense guides out there and the insurance industry and the agents have a vested interest in pushing certain types of products to less-than-well-educated customers.  In addition, the insurance industry seems to thrive on producing an endless array of complex products which often sound a lot better than they are.  This will be an attempt to offer some basic guidelines of buying life insurance coverage.

An Experiment In Bottom Fishing

Holding An Outsized Cash Position In Hopes Of Scooping The Market

Like many long term investors, I generally try to stay fully invested as a general rule.  Even at the best of times, cash typically drags down overall portfolio performance over the long term and most of us (myself included) are not great at guessing which way the market will leap next.  However, the past 5 years have presented investors with an amazingly large number of buying opportunities and I often found that being fully invested at such times meant that I could not fully take advantage of such opportunities.  I don't generally like keeping lazy cash around doing nothing, but I decided this spring to try hanging onto an abnormally high level of portfolio cash in expectation that a buying opportunity would materialize shortly.

That Was Fast

Chesapeake Caves To Shareholder Pressure Ahead of Its Annual Meeting

Chesapeake Energy (CHK) announced today that the company has pretty much completely caved in to pressure being applied by Southeastern Asset Management and Carl Icahn, who collectively own more than 20% of the company.  As I detailed in my last post (http://lifeinvestmentseverything.blogspot.com/2012/05/chk-little-help-from-your-friends.html), CHK has been subject to a great deal of criticism due to its apallingly poor corporate governance.  Against a background of extremely low natural gas prices, this criticism has helped push the company toward a crisis and the share price has plunged as a result.  There is still one major unresolved issue with respect to the company's Board structure, but the increased clarity in governance allows an investor to begin to make an informed decision about the company and formulate an investment thesis.