TITLE

Planning Considerations for Personal Injury Settlement Recipients

AUTHOR(S)
Cordell, David M.; Tombs, Joseph W.
PUB. DATE
January 2005
SOURCE
Journal of Financial Planning;Jan2005, Vol. 18 Issue 1, p26
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This article attempts to isolate a few of the factors and suggest a theoretical and practical framework to evaluate the decision of how much of the personal injury claim settlement should be received in the form of structured future payments. Clearly, the existence of a structured settlement alternative has a unique effect on the risk-return analysis performed by the planner. Structured settlements may offer a lower-risk, higher after-tax return alternative to the efficient portfolios of risky assets available to others. Therefore, the assumptions underpinning traditional investment analysis using modern portfolio theory (MPT) need to be adjusted. Using the assumption of risk aversion, Harry Markowitz showed that if all possible portfolios were plotted on a return-risk graph, a set of efficient portfolios could be identified that would meet two criteria: for a portfolio's level of return, no other portfolio has less risk, and for its level of risk, no other portfolio has more return. Individual investors prefer the portfolio that is on the efficient frontier and that meets the investor's risk criteria; that is, a more risk-averse investor would select a portfolio farther to the left on the efficient frontier than would a more risk-tolerant investor.
ACCESSION #
15616522

 

Related Articles

  • What happens after your clients receive their compensation? John Frenkel // Clinical Risk;Jul2003, Vol. 9 Issue 4, p155 

    The article offers information on how clients use and manage the compensation they received from structured settlements in medical negligence cases in Great Britain. The author points out that clients prefer to invest the money in the equity market, which he claims poses a greater risk. He also...

  • Is an All Gash Emergency Fund Strategy Appropriate for All Investors? Scott, Janine; Williams, Duncan; Gilliam, John; Sybrowsky, Jacob P. // Journal of Financial Planning;Sep2013, Vol. 26 Issue 9, p56 

    The article considers whether investors should keep emergency funds in cash. The authors draw upon utility theory and simulations to demonstrate that all-cash emergency funds are not only likely to reduce lifetime wealth, but also have a reduced possibility of meeting emergency needs. For...

  • ON A CONCEPT OF A HOUSEHOLD FINANCIAL PLAN OPTIMIZATION MODEL. Pietrzyk, Radosław; Rokita, Paweł // Research Papers of the Wroclaw University of Economics / Prace N;2015, Issue 381, p314 

    In the paper a model of life-long financial plan for households is presented. This is a cashflow-based, discrete time, two-person household model. Its main concept is expressing risk aversion of a household as the maximum range of survival scenarios for which the plan should guarantee stable...

  • Your New Rebalancing Act. Quinn, Jane Bryant; Ehrenfeld, Temma // Newsweek;2/18/2008, Vol. 151 Issue 7, p62 

    In this article the author examines investment strategies for the U.S. stock market in February 2008. In light of a volatile stock market during that period the author suggests that investors should hold a diversified portfolio to add value to their holdings and to avoid excessive risk. Provided...

  • The Legacy of the recession.  // Financial Management;Jan/Feb2010, p19 

    The article presents perspectives that the enforcement of financial conservation and risk aversion might not last long.

  • Creating The'Ideal' Financial Planning Practice. Moseley-Williams, Dennis // National Underwriter / Life & Health Financial Services;6/21/2004, Vol. 108 Issue 24, p14 

    Focuses on the creation of the ideal financial planning practice in the U.S. Steps to generate referrals; Permission marketing.

  • CE Exam.  // Journal of Financial Planning;Aug2013, Vol. 26 Issue 8, p66 

    A quiz is presented on articles on financial planning, investment advisers and personal finance published in this issue.

  • Maximise your personal wealth by putting the focus on strategy. Whelan, Dervilla // Accountancy Ireland;Aug2006, Vol. 38 Issue 4, p52 

    The article discusses the effects of having a good financial plan as a keystone to financial security for accountants in Ireland. It offers answer regarding the failure of many profitable business owners and executives to maximize their personal financial wealth. Lastly, it presents several...

  • We must solve America's financial literacy crisis. Tillett, Doug; Carberry, Joe // Hill;6/7/2007, Vol. 14 Issue 67, p26 

    The author reflect on how to teach American youth to manage their personal finances. They stress that these young people are at risk of making financial mistakes that could have serious long-term consequences. They suggest that financial literacy should start at home, where parents need to have...

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics