Category Archives: Investing/Financial Planning

A Political Weekend Across the Pond

Posted on May 4, 2012 by | Comments Off

The fact that so many US investors, including ourselves, will be watching the various elections overseas is as interesting as the elections themselves, and points to how small the world has become.

This weekend France, Germany, Italy, and Greek citizens enter the polls to set their political wishes in motion. I find it interesting these countries have a weekend vote, which may help the turn out, not a bad idea, but I digress.

France’s current chief Sarkozy, is facing a formidable foe and according to Robert McTeer will most likely not make it as a return leader. If this happens, austerity measures changes may be at hand.

An Italian vote is hopeful to reinforce confidence for Mario Monti, who took over in November from the scandal ridden Berlusconi chair. This vote, if correctly forecasted should be a stabilizer.

A less important regional election in Germany, however if polling is correct the opponent to the current incumbent  Merkel party will win, causing slight concerns as change may mean an adjustment in philosophy. This vote, if correct is more a hairline crack in the ice, but worth keeping an eye on.

A Greek parliament vote could expedite this little brother’s country’s exit from the Euro. (On a side note, yesterday in an all day seminar a very well-known international debt portfolio manager called the break up of the Euro within 3 years.)

As you know we are not politically inclined, but as the many moving parts begin to churn this weekend, we will be interested in the reactions from market participants. While something similar to the Oscar’s may be more entertaining, market participants, including ourselves will be focused on the above voting!

Have a Great Weekend!

JK

214-706-4300

www.jkfinancialinc.com

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Posted in Investing/Financial Planning, World Political

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Money Magazine Mentions John Kvale in Investments Article For Age 55-Plus Allocations

Posted on May 2, 2012 by | Comments Off

In this April’s 2012 Money Magazine, reporter Carolyn Bigda has a three-part article that discusses different possible portfolio allocations given various age groups. Carolyn and I had several long conversations concerning the stages of portfolio allocations given age and possible income needs.

In “Hollywood film hitting the floor style”, my mention is brief and not directly to many of the main points that we had made together.

Carolyn was a very sharp reporter and had great points, as such I thought it worth mentioning her article and letting you know it was available.

Here is the allocation we worked on together for the article for your quick viewing.

Have a Great Day!

JK

214-706-4300   www.jkfinancialinc.com

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Posted in In The News, Investing/Financial Planning, John Kvale, Personal

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Five High Points from the Robert McTeer Private Client Event, a Party Crasher with a good Question

Posted on May 1, 2012 by | Comments Off

This most recent weekend the Robert McTeer private client event occurred. We will speak in much greater detail in our coming mid-year Newsletter but we wanted to hit a few of the high points while Mr. McTeer’s words were still fresh and the current economic situation most unchanged.

We also wanted to have a special thanks to clients, friends, and the party crasher, who actually asked a good question, but remains unidentified.  Thank you all and you too party crasher!

Donald and I compared our three high point notes, and with only one overlap, will bring you the top five with the first point being our collective overlap:

  1. The Fed’s credibility is key to holding current rates low. The natural inference would be that if the Fed lost credibility rates may move. I asked Mr. McTeer a direct question and will expand his thoughts in our Newsletter (DC & JK)
  2. Inflation in not inevitable (DC)
  3. The Tax Cliff of possible increased taxes and lowered government spending is estimated, by Mr. McTeer at a 7% GDP hit. Yes you read that correct, SEVEN PERCENT! (JK)
  4. Banks parking excess reserves at the Fed may prove a target for money supply fans. i.e. Get the money moving out of the Fed to get the economy moving (DC)
  5. “Those betting against Bernanke’s intelligence will lose!” A direct, unsolicited complimentary quote from McTeer (JK)

Great questions, great time, and great fun. We thank you all as we filled less than 90 minutes of a saturday into hard-core economic discussions.

Thanks Again to everyone !

JK

214-706-4300

www.jkfinancialinc.com

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Posted in Economy, Education, Investing/Financial Planning, Market Comments, World Political

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Zigg Drops by with a Mcteer Question and a Few Grounding Thoughts

Posted on April 27, 2012 by | Comments Off

Zigg, making a pilgrimage from his very crowded small island, on his way to the store for supplies as many of his new fair weather friends are cramping his style and eating his food, stopped by last night to see the family and say hello. He had heard about the McTeer event and added a nice question of his own, which we will certainly ask Mr. McTeer.

For those not familiar with Zigg, he is our mythical friend who is a contrarian. He Ziggs when others Zagg, usually taking an uncomfortable position at any given time. His thoughts are always helpful in keeping things in perspective.

In addition to the McTeer question he shared the following thoughts:

  • This is an Election Year, see (Research Paper) for history
  • Tax cliff may come in the form of possible new taxes
  • Little Brother Country Issues i.e. EU
  • A years worth of market returns already

Zigg was not being negative as he never takes a harsh stance, however he did warn of becoming too optimistic and letting our guards down.

Thanks Zigg, we have missed you and glad you dropped in. It’s funny to see him move from the only positive person, to being a bit more conservative in his views, once again almost alone in voice.

Have a Great Day and a Super Weekend!

JK

214-706-4300

www.jkfinancialinc.com

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Posted in Economy, General Financial Planning, Investing/Financial Planning, Market Comments

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What are the historical odds for an Incumbent President to be Re-Elected? …..About 70%!

Posted on April 25, 2012 by | Comments Off

Given our surprise findings (76 Years of Capital Markets…) on pre- election year capital market research, which continued in form in 2011, we set off on another adventure.

In our own, overly analytical way, we wanted to find out what the historical chances for an incumbent President to be re-elected, using the history of the United States as our forecast mechanism.

Here are the facts, many of which you may not remember from your American History Classes:

  • There have been 56 elections in the United States Prior to the November 2012 elections
  • In total there were 25 chances for an incumbent to be re-elected. (Death, and an elective no second try, are the main reasons for not having a second term)
  • In total only 8 out of 25 incumbent presidents were ousted for a 68% pass rate, including FDR’s near two decade run
  • Modern day (aligning with our prior research of 76 years) there were 11 chances for an incumbent to be re-elected
  •  In Modern day times, only Hoover, Carter and Bush Sr were willing to go a second, but “one time” presidents, making for a 73% chance pass rate

From our perch, whether the full enchilada history of the US, or the “Modern Day” incumbent president, we call it a 70% historical chance of being re-elected!

So there you have it, the facts are what they are. As you know we are not allowed to have comments due to the compliance issues. Knowing this might be an interesting issue, we are once happy for compliance!

Have a Great Day!

JK

214-706-4300

www.jkfinancialinc.com

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Posted in Investing/Financial Planning, Market Comments, World Political

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Watching Spain for Possible Pain, A 4 am Alarm Clock CST

Posted on April 18, 2012 by | Comments Off

Often times market conclusions are drawn, if for no other reason, just to have an explanation. The thinking goes, capital markets are doing this, so there must be a reason.

The recent movements and concerns of Spain do not fall in this category. Spain, unlike Greece is a larger and a more important participant of the EU.  It’s faltering would have major impact. As such, as Spain’s bond yield and CDS (insurance on the credit quality) have risen, capital markets have taken notice.

This chart from Bloomberg shows the Spanish general government 10 year bond yield and the SPY (S&P 500).

As the orange line (Spanish debt yields),  rise above 6% (a pseudo threshold level), market participants have, and are, taking notice. At 4 AM Thursday  (4-19-12) a large new debt auction will transpire in Spain. The demand of this auction will be interesting and will give us, as well as other market participants, a good read of confidence moving forward.  (Earlier this week, similar auctions went well.)

I will try not to wake the rest of the Kvale family!

We will update you with any surprises.

Have a Great Day!

JK

214-706-4300

www.jkfinancialinc.com

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Posted in Investing/Financial Planning, Market Comments, World Political

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Our 5 Findings From 2011 Personal Tax Filing Season

Posted on April 17, 2012 by | Comments Off

Congratulations, it’s almost over ! The official end of regular tax season transpires in just a few hours, and if you are not completely finished yet, click here to see our last post for the forms you may need to file an extension.

Before the information gets cold and thoughts move on to spring, fun, pools and sun, we wanted to give you a few high points we found interesting this season.

  1. AMT (Alternative Minimum Tax) reared its ugly head more frequently this season.
  2. The new tax basis form did not disappoint, and as such there were delays, confusion and frequent redo’s. (Form 8949 Box A, B, C)
  3. Most returns had more documents and greater length, due somewhat to the new tax basis, never the less contributing to bits of confusion as times.
  4. Wash Sales made several cameo appearances, due to market movement, and reporting issues.
  5. It was a stressful season, unlike any for many years before. Through our communication with individuals, professionals, institutions and reporting agencies, IT WAS MORE STRESSFUL, so do not be frustrated if you felt the same !

Bottom line, if you felt a bit more frustration this year, you were not alone. It was rough from all angles.

The good news…It’s almost over !

Have a Great Day!

JK

214-706-4300

www.jkfinancialinc.com

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Posted in Tax Related

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Not Finished with Your Taxes? Meet IRS Form 4868, Automatic Six Month Extension

Posted on April 16, 2012 by | Comments Off

It’s ok, and there is nothing to be ashamed of if you didn’t finish your taxes!

Tuesday, April 17th, 2012 is the official deadline for regular tax filing. If you have not completed your taxes for whatever reason, meet IRS Form 4868.

By simply downloading this form and filing in the one small area, you will be granted an automatic six month extension, no questions asked. Do remember that if you owe taxes and you do not send in enough funds to cover your shortfall, you may be subject to penalties.

This tax season has been the toughest for us in the last 10 years. The new tax basis rules and adjustments have made for a confusing season, and we are not even CPA’s!

So if you ended up running out of time, be sure to send in Form 4868 along with any possible shortage in taxes you may owe. Now if we are up against the wall again in six months, then we have an issue, but that is a full six months away. Just because we have six extra months, does not mean we have to use all six months.

Happy Tax Filing Eve Day, and start to another great week!

JK

214-706-4300

www.jkfinancialinc.com

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Posted in Investing/Financial Planning, Tax Related

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90 Day Treadmill Under Way !

Posted on April 13, 2012 by | Comments Off

For those new to our writings and as a short refresher to regular’s, we monitor quarterly earnings expectations and results as a way to gauge the health of the current economy as well as the capital markets. Our pseudo negative term, “90 Day Treadmill” comes from the constant push from wall street to meet expectations on a quarterly basis, which is somewhat short-sighted but constant.

At the commencement of earnings season, according to Thomson Reuters here are the expected numbers:

Overall for Q1 2012, earnings for the S&P 500 are expected to grow a meager 3%, much slower than the last several quarters.

Top 3 Expected Growth Sectors:

  • Industrials  10.8%
  • Financials  8%
  • Technology  7.8%

Bottom 3 Expectations:

  • Telcom  -14.4%
  • Materials -12.9%
  • Utilities  -9.3%

The S&P 500, according to Thomson Reuters is currently trading at a 15.1 P/E which is near the long-term average. Given the slow growth expectations and an election year, this may be a stretch in valuation unless earnings surprise.

Have a Great Day and a Super Weekend!

JK

214-706-4300

www.jkfinancialinc.com

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

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What is all the fuss ? Non-Farm Payroll Disappoint !

Posted on April 9, 2012 by | Comments Off

Just like clock work, market participants tend to overshoot at each end of the spectrum. This time possibly raising expectations too high.

This chart from a fellow wordpress blogger,  Macro Monitor, shows not only the losses during the latest recession, but also if you look to the very far right (latest data) and see the nice blue bars rising steadily, until the Friday dose of reality report, you can see how many participants were sucked into believing all was clear.

We are not saying the clouds are turning dark and all is lost, just keep a reasonable perspective is usually helps in investing.

Have a Great Day!

JK

214-706-4300 www.jkfinancialinc.com

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Posted in Investing/Financial Planning

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