Question of the Week, Including a Personal Story…. “How Frequently Should I Review My Will?”

Posted on January 27, 2012 by | Comments Off

Our question of the week, this week, comes from our field of dream clients again (that’s you guys), but is also part of our regular repertoire of questions we ask when meeting new clients. This weeks answer comes with a slight twist due to possible tax law changes.

From our question one can infer we recommend everyone have a Will. Even if your situation is relatively simple, a lack of Will directives can extend the process in time and increase financial costs.  As an example, my Uncle passed away about 13 years ago and was single with no children. Unfortunately his Will could not be found. While his estate was not complicated, the lack of organization and direct beneficiaries strung the settling of his estate process out to almost 2 years, and greatly increased the expenses.

We recommend a review of your Will at least every 5 years or earlier if your situation changes. By dusting off that Will and reviewing the major players (Executor, Trustee, Guardian, Power Of Attorney) you may find someone in the document you have lost contact with, or whom a better person may fit today. Take action and call your Attorney to have these folks updated, it is an easy process and well worth your time in the long run. 

Here is the Twist:

There are possible major Estate law changes on the horizon which we will constantly be notifying you of over the next several quarters. Given this fact dramatic estate planning changes may be ill-advised at this time. Please do not take this as a reason to procrastinate necessary updates, but there are significant tax laws sun setting at the end of this year. 

We are not attorneys or attempting to practice law so see your attorney for that, but do dust off that Will if it has not seen light in over 5 years, you might be surprised at what you find!

Next week, we have a CFA related event that brings Donald in town for a whirl wind tour and a meeting of self-professed expert forecasts for the year 2012 (we will bring you the commentary.)  Office upgrades continue as this week brings a new high-tech trading platform and a Tamarac system,  which we will explain soon.

Have a Super Day and A Great Weekend, and don’t worry Zigg is doing fine!

JK

214-706-4300

www.jkfinancialinc.com

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Posted in General Financial Planning, John Kvale, Personal

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The FOMC Mistake; Calling it as We See it !

Posted on January 26, 2012 by | Comments Off

Yesterday the FOMC released their regular statement regarding policy and actions at 11:30 AM central time followed by an extended live Q&A with the Fed Chief,  Bernanke. We feel the FOMC has made a mistake with their statement.

Here is the specific sentence in the release that has us concerned

“In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”

As is often the case when we have a strong opinion, we have made it a point to not read the various analysis before voicing our thoughts.

Here are the reasons we feel this statement was a mistake:

  1. There was nothing gained by pushing the time line out another year right now. Keeping that statement in the hat for this time next year (if necessary) would have been a much safer way to go.
  2. It is too hard to predict what the economic situation is going to be that far in the future (We liked the original runway of time as it pushed any fed decision out-of-the-way of the election.)
  3. Investor  confidence (domestic and more importantly internationally) is paramount in retaining control of US interest rates. In investment professionals minds, holding rates low until next year, no matter the economic situation was feasible. Extending the stated term another year slightly cheapens this statement AND their original statement of low rates until 2013.

“Hot on the Long End”

Ultimately what we will now even more closely watch for is longer termed bonds rates rising.  In Wall Street lingo, it is called getting “hot on the long end.”  Rates have a funny way of making officials and investors eat their words. The FOMC changing their minds in the future would not be the worst thing that has ever happened.

Have a Great Day!

JK

214-706-4300

www.jkfinancialinc.com

PS We are not being Zaggers, but do call it as we see it !

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Posted in Economy, Interest Rates, Investing/Financial Planning, Market Comments

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Dancing in Davos with Tea Leaves from a State of the Union, 90 Day Treadmill (The Mouse Wins)

Posted on January 25, 2012 by | Comments Off

As the World Economic Forum’s Annual Davos retreat  officially kicked off in Switzerland today, we find ourselves more interested in pondering the tea leaves from last night’s State of the Union (transcript.) 

Just so you know:

Yesterday early morning during our first 90 Day Treadmill post of this quarter, my laptop mouse and I had a conflict, with the mouse emerging as the winner.  Here is the full post for yesterday’s post as once the mouse took over only a partially completed early am email was sent, thanks for your patience. 

Dancing in Davos

There will certainly be interesting comments coming from Davos, however as of late we feel it is more of an honor to be seen at the summit than the importance of the delivery of information. Most programs are streamed and we see many acquaintances on the schedule over the next few days, however, remember this summit is more of at “Think Tank” summit than solution.

Tea Leaves in the State of the Union

While we are cautious to declare the finding of a needle in the haystack yesterday evening during the State of the Union address, we are interested by much of the rhetoric, especially concerning natural resources. Worth noting, it is always much easier to discuss than take action especially during an election year.

That’s it for now, from a very rainy Dallas Texas, finally! 

Have a Great Day!

JK

214-706-4300

www.jkfinancialinc.com

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Posted in Education, Investing/Financial Planning, Market Comments

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90 Day Treadmillers (Earning Season) Update – Again

Posted on January 24, 2012 by | Comments Off

90 Day Treadmiller's

As we mentioned in the Parting Thoughts section of our Q1 2012 Newsletter, we understand this information may not be as exciting and riveting to others as it is to us. Because of this fact we stretch the bands of humor to help keep your attention.

Our 90 Day treadmiller (we are open to name suggestions) represents the fast, but constant job managers must participate, to keep Wall Street happy while also developing longer term visions and strategies to grow their business.

Here are the results and expectations, so far from Reuter’s, but we dig a little deeper for reasons that will explain themselves shortly:

With 16% of S&P 500 members reporting earnings about 2/3rd of the members are beating estimates to the tune of a 1% growth rate (recall, the fourth quarter was a tough one for many.)

Growth Expectations for the Quarter are just over 23% (Wow, you may say, but let’s dig a bit deeper)

Top Expected Growth Sectors:

  • 892% –  Financials **
  • 13% — Energy
  • 11% — Industrials

Bottom Three Sector Expectations:

  • (22%) –  Telcom
  • (11%) — Materials
  • (3%) — Utilities

**Skewd Numbers:

Due to the bounce back in earning from the Financial Sector, the giant expected growth rate is greatly skewing the average growth for the S&P 500 this quarter. Without Financials the expected growth rate is a mere 1%, much more reflective of the latest quarter drabness.

As I finish this article in my usual spot at Starbucks early this am, what I thought was a glitch in the Wifi, was actually me losing the battle between the mouse and control.  If you happen to receive a raw unedited version of this article via email, we hope you enjoy our originality!! haha

Have a Great Day!

JK

FFTFF (Feel Free to Forward to a Friend)

214-706-4300

www.jkfinancialinc.com

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Posted in Earnings Season

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Favorite Question of the Week from the Field; Zigg Still on Vacation

Posted on January 20, 2012 by | Comments Off

With our friend Zigg still on his island and his friends intent on staying for a while, we decided to shift gears and discuss our favorite question of the week.  This week’s question derives its origin from several conversations we have had lately with client’s, making it topical for discussion.

Should I only put the amount the company matches in my 401k? and a follow-up question,  Should I put extra, non-pre taxed funds into my plan?

NO and NO !

We recommend you put as much as possible in your company 401k even if there is no match at all. There are various restrictions such as compensation and general government caps which limit contributions, but putting as much PRE-tax funds into your 401k as possible, is our recommendation.

Various plans allow you to continue after-tax contributions to retirement plans, which we are not advocates of doing.  Most plans do not have the ability to provide for specialized allocations which may be more appropriate for investment.  Don’t bypass saving these extra dollars and spend!  Just save these funds in a more self-directed manner. 

In closing, just because Zigg is on vacation, does not mean there are not sharks out there, keeping our guard up for an “Event” is still a good idea, however, economic, consumer, and earnings (more discussions soon) look very good!

Have a Super Day and a Great Weekend!

JK

214-706-4300

www.jkfinancialinc.com

 

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Posted in General Financial Planning, Investing/Financial Planning

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Q1 2012 Newsletter is Posted for Your Perusal, Little Brother Gets a Confidence Vote

Posted on January 18, 2012 by | Comments Off

Our Digital Q 1, 2012, professionally espoused coming year forecast Newsletter has been posted to our Website on our Newsletter Page. We question forecasts from any professional, but work hard to give you our best thoughts and ideas.

Q1 2012 Newsletter

For now, our internal list of very important items concerning capital markets has seen EU worries drop in importance, as China economic growth, and US earnings climb the rungs of importance.

Little Brother countries are having confident government bond auctions resulting in lower interest rates (See: “What Happens When Investors Lose Confidence in Your System” in our Latest Newsletter), and that is relieving investor concerns, which has resulted in a more positive capital market.

Starting tomorrow, the 90 day treadmill really kicks into high gear. With our ears to the conference call line grindstones, we look forward to bringing you varous managers outlooks soon!

Have a Great Day!

JK

214-706-4300

www.jkfinancialinc.com

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Posted in Earnings Season, Economy, Investing/Financial Planning, Market Comments, Newsletters

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Zigg’s Continued Sabbatical, Newsletter Update, a Happy Capital Market, Long Weekend

Posted on January 13, 2012 by | Comments Off

We let Zigg have another week off as his island is full lately and he has been busy chaperoning the party.  We feel certain his new-found friends will abandon him eventually, leaving him to espouse his views as his Zagger fair weather friends return to land.

The beginning weeks of the new year mark our annual “Preview and Review” of the capital markets, remember we are skeptical of so-called ”Professional” forecasts, including our own. Our re-designed Newsletter (thanks to Kathy our editor) is soon to arrive in your mailbox and will also be posted to our website and has a great review of the latest year’s results and our expectations for 2012.  In “What Happens When Investor’s Lost Confidence in Your Government” we review what happens to our hard-earned investment dollars when government bond rates rise, which has not happened in almost three decades. Believe us, just because it has not happened lately, does not mean it will not, or cannot.

A very important part of our job is to continually review, confirm, and educate ourselves on changes and opportunities in the capital markets .  Yesterday I spent over six hours in a rigorous examination of the options markets and new technology which we have been reviewing for almost a year, but will come on-line in full force in the next few weeks.  In a timely, final of four-part series, concerning our Armageddon insurance strategy, we feel even more confident in our early findings and results, see “Investing for the Long Term, While Protecting the Short” also coming up in our newsletter.

In manic like form, the capital markets and their participants are still cheering the Holiday spirits, ignoring negatives, and focusing on the positives. While we have been positive in Zigg fashion for some time, we are confidently aware sentiment can change faster than the lead of a Dallas Cowboys game. That’s ok, we always keep our wits. But do stay tuned!

We hope you have a happy weekend.  Next week, as our Newsletter is completed, we enter earnings season so we will be back to our more frequent posting schedule, as this latest week has been a bit of a catch up time for us.

Thanks for reading and have a great day and super extra long weekend! Domestic capital markets are closed on Monday in honor of Martin Luther King.

JK

214-706-4300

www.jkfinancialinc.com

FFTFF (Feel Free to Forward to a Friend)

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Posted in Investing/Financial Planning, Market Comments, Uncategorized

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Fourth Quarter 2011 J.K. Financial, Inc. Performance Report Cover Letter (Clients)

Posted on January 12, 2012 by | Comments Off

Dear Investor,

Enclosed you will find your Fourth Quarter 2011 Performance Report. As a reminder this report is a summary of your monthly statements and transactions you receive directly from our outside custodian along with the IRS tax basis for each of your investments.  This report summarizes the last 90 days activities and consolidates multiple accounts into one report for a total comprehensive view.

We have added a new easy to read 5 years of Historical Account Value quarterly bar chart to go along with our newly added YTD Cash deposit and Withdrawals ledger report, larger Account Summary Graph Pie chart, Cover Page Investment Allocation Summary, and greater return details.

As mentioned in our recent street-cents article, we have embraced green, cutting paper consumption by 50% and saving your storage space. Your report is printed on the front and back of pages now.

This from our Q 3 2011 report:

“If history holds true, the final quarter of the year is the best for capital market returns, and we do feel there is ample possibility for a nice finish to the year.”

Capital markets returned to their senses in the most recent quarter and gained just over 11% to finish at 1257.46 on the S&P 500. Interestingly, the index started the year at 1257.64. While the domestic capital markets made very little headway this year, companies within the index had earnings over 15% greater than the prior year. This fact makes the current domestic capital markets, all other things equal, 15% cheaper than last year and well below historical averages.

World markets, small companies, and just about every other equity oriented asset class faired much worse. According to Bloomberg, globally, equity markets dropped an average of over 12%, with emerging markets fairing much worse.

While our election cycle year research would predict 2012 not to be as good as 2011, we believe it is possible to have a payback year from 2011 provided some clarity is garnered on the EU situation. It is worth noting by the time ALL, clarity and confidence return, capital markets will have already taken this into consideration, and will most likely already be much higher than we are today.

We will be sending a separate tax report by mid February that will summarize taxable items and help in your government tax filing requirements should you have a taxable account. IT IS VERY IMPORTANT YOU WATCH FOR THIS REPORT AS IRS RULES HAVE MANDATED CUSTODIAL REPORTING, WHICH WILL NOT BE 100% ACCURATE DURING THE TRANSITION PHASE. OUR REPORT WILL BE THE MOST ACCURATE. We have included our latest private policy statement for your review. Also, we want to take this opportunity to offer our latest ADV filings; Requests for review will be accepted via phone, mail or email, and mailed immediately upon request.

Enclosures (Fourth Quarter 2011 Performance Report, Private Policy Statement)

John A. Kvale CFA, CFP

214-706-4300

www.jkfinancialinc.com

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Posted in Clients/Clients Only, Performance Report Cover Letter

Somebody is Watching You Part II – Additional Cost Basis Reporting Commenced

Posted on January 9, 2012 by | Comments Off

Somebody's Watching Me

As of 1-1-12, phase two reporting, Mutual Fund transactions, are now being tracked and will be reported to the IRS next year. This continues the multi-step phase in of mandatory tax reporting created by the Emergency Stabilization Act of 2008.

Last year, we resurrected “Rockwell’s” one hit wonder and wrote a “Somebody’s Watching Me” article to announce the first phase, US Government stock transaction reporting, which became law 1-1-11.

As the transition phase continues, there will be discrepancies. We expect soon to be sent tax cost basis reporting from our custodial vendor for 2011 to have inaccuracies (ONLY STOCK TRANSACTIONS HAVE BEEN REPORTED TO THE IRS FOR 2011.) We will be sending our firm’s regular realized gains and loss report which has the most accurate and long-term basis reporting along with reminder instructions.

As time passes we expect the convergence of tax reporting and accuracy, however, not for several years.  We do believe these reporting requirements are  good, and the new law was long overdue, as technology now easily allows for such tracking. The transition period will have a few bumps, but for the long-term, the equal playing field established for all tax payers, and the long-term benefit to us as taxpayers, is well worth the interim hiccups.

Have a Great Day!

JK

214-706-4300

www.jkfinancialinc.com

FFTFF (Feel Free to Forward to a Friend)

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Posted in Investing/Financial Planning, Tax Related

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A New Green Start to 2012 – Interesting Stats Created By You !

Posted on January 5, 2012 by | Comments Off

Happy 2012 ! It seems like only yesterday we were saying hello to 2011, but here we are already, starting a new year. So let’s get going, we are going to have a great 2012!

We are happy to announce we are taking “green steps” in 2012 as a new, more economical, duplex, color printer, has arrived at our office today. We hope the execution of new quarterly reports and newsletters does not create  subjects that we need to tell you i.e. delays.   Personal ”Electronic Vaults” have been very popular and are gaining in use as well, if you wish to take  “green steps” in 2012 let us know at cathy@jkfinancialinc.com, we will open your new personal Vault within 24 hours.

A special thanks to our readers of www.street-cents.com as last year marked several new highs:

  • We had over 5400 views of our site in 2011
  • We posted 136 new articles in 2011 (all of them excellent…kidding)
  • Our total article count is now over 430 and growing

Thank you very much, we are extremely happy with the popularity of street-cents, and look forward to another, even better, Wall Street Simplification, year in 2012, FFTFF (Feel Free to Forward to a Friend.)

We thank you for your continued referrals and look forward to meeting your like-minded friends, family, and business acquaintances, should they need financial assistance. Thanks very much for keeping us in mind, and sharing our services.

We are giving Zigg the week off this week as the Zaggers are lying low and the Newsletter, Quarterly Reports, and a Rockwell “Somebody’s Watching You” Part  II is making its way to the front of the new article line!

On a personal note, our household started the year off with a broken hot water line last night (that’s what that hissing sound coming from the wall was…!!!), making the much-needed morning clean up impossible, just a step for a gang of odorous maximus steppers today!

Have a Great Day!

JK

214-706-4300

www.jkfinancialinc.com

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Posted in A Look Back and The Week Ahead, Clients/Clients Only, John Kvale, Personal

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