Bonds and Interest Rate Movement Analysis/Reminder, Bonds are the Voice of Reason Portion of Portfolio’s, Friend and Foe

Almost every portfolio needs some type of bond investment. Bonds cushion movements during volatile times, kick off regular interest payments usually very frequently and act as a foundation for the entire portfolio.

Bonds are the voice of reason in our portfolios… Much like the friend you had that always calmly mentioned the risk associated with some youthful action that upon second thought was not a good idea…

While a cushion and form of stability during bad times, during higher interest rate times, they act as a small headwind.

Bonds and Interest Rates – Tug of War

As interest rates move up, bonds face a bit of a headwind in the short term, but eventually they catch up to the new higher prevailing interest rate through either maturity in the form of individual holdings or run off in Mutual Fund Holdings.

The following chart show a good example of rates down, bonds up and then the change of rates up and bonds down a bit…

Green = Rates Red=Bond Fund

Just a friendly reminder of short term headwinds by our must have friend, the bond!

Have a Great “Bond v Interest Rates” Reminder Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Work Remote Trends from Our Friends at Visual Capitalist versus Kastle Back to Work Index Update …

Long time followers (maybe even short time) know we really enjoy graphics, and especially when we can compare several sources on the same subject…

Luckily another new fantastic chart from our friends at Visual Capitalist that would compare well with a long time regular, Kastle Back to Work Index update hit our email box last week….

Here we go:

Industries Embracing Remote

As an interesting side note, this weekend while working on this post and listening to a fantastic 80 minute podcast from Satya Nadella the CEO of Microsoft, he mentioned that the entire workforce of Microsoft will be offered a staggered three day in the office work week moving forward. There were certain creative groups within the company that were just unable to function well remotely…. which makes sense…

From the Visual Capitalist article- interesting stat

Broadly speaking, 12% of all Canadian paid job postings on LinkedIn offered remote work in September 2021. Prior to the pandemic, that number sat at just 1.3%.

Kastle Back To Work Index

Kastle is a National Security Company among other things that has smartly used their resources to track office occupancy… well done guys, just terrific use of your resources for the betterment of all

Recall these hit our in box weekly…. note the immediate movement up post delta rollover… still a long ways to go, and per the above a population adjust future may never go back to 100% occupancy!

Can see the come back in the longer term trend in this chart!

Have a Great “Double Comparison of Remote Work” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Overzealous Spam Filter on New System … HUGE Social Security COLA … 5.9% to Be Exact, Wow…. COLA Pension Recipients Check Your Benchmark… Birthday Week – Jen and Donald Same Day Yesterday, Happy Birthday Guys … Friday Before Busy Virtual Conference Week

Our summer project this year was to replace our server, update our office Wifi with greater speed and security as well as move our email system to a new more secure platform…

All this wonderful security and speed has led to an occasional overzealous spam filter…. we are validating all emails as safe, but the super sonic spam filter still grabs them every once in a while… please re-email us is you do not hear from us in short order… apologies for the accidental Ghosting, we thought we had this all fixed, but two instances in the last two weeks led to this announcement….

Big COLA Increases

Back in late July of this year, we warned here of possible GREAT news for Social Security and COLA Pension Recipients….

On Wednesday (10-13-21) the BLS (Bureau Of Labor Statistics) released the final month of the third quarter CPI-W which gave the average for the third quarter and is used to calculate the COLA (cost of living adjustment) for next year’s (2022) Social Security Benefits….

From this Release :


Fact Sheet SOCIAL SECURITY
Social Security National Press Office Baltimore, MD
2022 SOCIAL SECURITY CHANGES
Cost-of-Living Adjustment (COLA):
Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2020 through the third quarter of 2021, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 5.9 percent COLA for 2022.

Pension recipients, check that benchmark … you may have a nice surprise awaiting next year … YAY!

Birthday Week THE SAME EXACT DAY

Always try to do something unique for the office Birthday’s … but some how we ended up with two on the exact same day…. Wow… tough creativity all at once…

Happy Birthday Jen and DC the Brain… You guys are great!

Friday Before Full Week of Seminars and Welcome Learning

Today is a Friday and next week we have a full week of Virtual Seminars and Fantastic learning… Looking forward to it for sure… Will bring you any important details in short order…

Have a Great Weekend, Enjoy your Friday and Weekend!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

How Fast is Your Internet Speed? It Depends on Where You Live!

With travels most likely in the throws of coming back on line (hopefully) we thought this timely graphic World Internet Speeds interesting….

Of course from our friends at Visual Capitalist ..

Can You Imaging being without the Internet for any length of time? Yikes

The World’s Fastest and Slowest Internet Speeds

Have a Great “Fast Internet” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

HOLIDAY PARTY REMINDER … Early Friday for Collective Safety (Kids on the Streets) …CONFUSION – Off Monday, Loosely Tethered ….

HERE IS YOUR REMINDER FOR OUR 25TH ANNUAL HOLIDAY PARTY

DALLAS ATHLETIC CLUB FROM 3-5 PM

SATURDAY BEFORE THANKSGIVING NOVEMBER 20TH 2021

INVITATIONS GO OUT LATE NEXT WEEK

HOPE YOU CAN COME

CONFUSION ON HOLIDAY

At this moment, we think the Federal Reserve will be closed on Monday which means wires will not occur and the post office…. there is confusion on Banks…

We would plan on not being able to move money Monday, just to be safe…

Rowdy Kids Friday and Holiday Weekend

Today is a Friday, heading into a long weekend due to the local Texas State Fair Day weekend with kids off Monday and an early exit today….

For the collective safety of the local residents and a bit of a break before fall kicks in completely, we will be out early today and loosely tethered on Monday.

As a kid, sure do not recall so many Holidays…. maybe they went by so fast…. oh well!

Have a Great Friday, Super Weekend and Talk next week!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Q 3 2021 Review – Let the Taper Begin, Interest Rates, Bumpy Season

Let the Taper Begin

In late 2018 the FOMC learned a valuable lesson that they are intent on not repeating.  At their most recent FOMC meeting Jerome Powell, chair, made it very clear that the large monthly asset purchases, $120 billion to be exact, will begin to be tapered.  Powell also made it very clear that the eventual raising of interest rates would not occur until the taper was complete unlike the events of 2018 in which the FOMC tapered and increased short-term interest rates at the same time, much to market participants dismay.

Bottom line if all goes well scheduled monthly asset purchases will be trimmed and eventually reach zero sometime next year.

Interest Rates

The most widely followed interest rate, the 10-year US treasury, after having a startling move earlier this year from under 1% to over 1.7% dropped back down to the low 1.2% during the most recent slowdown due to the variant.

Whether Powell’s comments, or the turning of the variant, interest rates have taken note and moved up smartly to over 1.5% beginning the normalization of higher interest rates which is very good long-term for the financial system

Kyle Bass Predictions

In our Q4 Newsletter we noted some very positive predictions from local financial mogul Kyle Bass, namely oil reaching $100 a barrel before the year end and continued Federal Reserve protection along with a push through to the end of the variant.

Hopefully all of these predictions come true.

The Worst of Times the Best of Times

September and October tend to be the most challenging months for Capital Markets mostly due to large institutions, think Fidelity as an example, closing their books on the year which make for more volatile times. So far, this theme seems to have played true.

The good news is notwithstanding our 2018 example from above, November and December tend to be some of the better months of the calendar.

As we head to the end of the year, we will be watching all of these and many other things very closely and will be communicating live on our blog at street-cents.

Sincerely,

John A. Kvale CFA, CFP

Founder J.K. Financial, Inc.

Sudden Increases in Cell Spam … Don’t Click on That Text … Don’t Answer that Call … Personal Mistake … Cyber Updates

About a year ago, a note was spotted that we would have a near 400% increase in the next 12 months of spam calls …. at the time seemed unreasonable….

Fast forward to today, think the estimate was low….. based on everyone’s experiences…

Cyber Update – Spam Calls and Now More Recent TEXTS

Last week we had a family get together where a reminder went out to all member NOT to answer calls that had a number very similar to any of our and more importantly to NOT click on the new relentless texts that seem to be picking up steam in volume….

Almost got me…. with our cell bill being on auto pay… a nice thank you text from our cell provider followed by a link for a special gift ALMOST got me….

AT&T Free Msg: August bill is paid. Thanks, [name]! Here’s a little freebie for you: [link].”

Late last week our local paper, The Dallas Morning News ran the following story (think you can read the story even without a subscription…some great screen shot examples)

Here is a great article by the Federal Trade Commission on examples and how to avoid as well…

On Saturday, the family was asked to save any of their fake Texts…. in two days, this is what we ended up with…

The Call Spam filter is busier than ever but certainly does not catch all the spam calls…

Personal Accidental Mistake

Early in the year while on a conference call with two other folks, an attempt to decline an unfamiliar call turned into an accidental answer… the spam call then began recalling about 20 times before I could get off the conference call and block the number….

If it’s important they will leave a message… everyone is getting these same calls, so all will understand…

Don’t recklessly click or answer (reminding myself too) ….

Have a Great “Don’t click the bait” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

September 2021 Financial Planning and Capital Market Review – By John Kvale

Hello and Welcome to our September 2021 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!

Hope you enjoy!

September 2021 Video

YouTube

Financial Planning Tip(s)

Email Providers

In this post, we spoke to the safety of signing your name to the biggest email providers if possible for your own safety….

Of course not all names will be available, but if yours is, it is a great idea to take it, even if you never use the email platform… think scammers acting as you!

Capital Market Comments

Jerome Powell Gets Angry, Taper Coming

In this market related post, we noted that Powell, head of the FOMC (Federal Open Market Committee) was very stern in taper talk as well as the following quote from us:

“On another totally different and non-market related and non-economic related topic several federal reserve members had transactions over the past year that were not optically good for the federal reserve. One of the members is our very own favorite Robert Kaplan who had multiple large transactions in securities that the federal reserve was involved.

While we will voice no opinion on this … Jerome Powell was very stern surprisingly, and in our mind so stern that it could be an occupational loss for some of these members. It will be interesting to see what comes out of this, but this is not the end of it and once again Powell was very angry and forceful on this point.”

Unfortunately, Kaplan our favorite announced his retirement as well as the other board member, before the end of the day after our post!

Have a Great Day, Talk to You at the End of October!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Q4 2021 J.K. Financial, Inc. Newsletter … Video Audio Podcast Review ! By John Kvale CFA, CFP

Welcome to our Video and Audio Podcast Review of our Q4 2021 Newsletter. For those on the road or just unable to grab the time to read, our podcast type review gives you the behind the scenes insight to our thoughts, observations and deep views of the entire Newsletter.

Click the Download button below, for a direct link to an electronic version (an early peek-good ole fashion paper versions are on their way to you shortly) and here for our Newsletter page

BREAK IN – We hope you see videos in the email notification, but if not, you may click on the code for the actual video…hence the dual videos, hoping one works on your cell!

Let’s get going! We hope you enjoy!

Q 4 2021 Newsletter

(YouTube)

Irrational Expectations

An article that just kept giving us more great information:

Kyle Bass Most Important Predictions

  • Oil hits $100 per barrel this year … due to mal investment over the last 7 years.
  • The Federal Reserve will continue to support the markets with continued purchases.
  • We push through the Delta Variant and there is a REAL re-opening effect that works its way through the economy

We hope you enjoy … talk to you at the beginning of the year !

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

Federal Reserve Detailed Analysis from Last Weeks Announcement … A Very Stern Jerome Powell

As mentioned in our Preview Post last week, we have been watching the FOMC as their posture is due to change with regards to the stimulus put in motion early last year….

Jerome Powell Gets Tough

Recall as the economy was shut down last year the FOMC chaired by Jerome Powell and its members moved interest rates on the short end of the curve to zero and commenced a $120 billion per month purchase of treasuries and mortgage back securities. Both of these moves were to help stimulate the economy and to stabilize the capital markets.

Meeting their goal of stabilization and a much-improved economy the FOMC are ready to shift policies and unless any major economic or other disruption occurs Powell made it very clear that he expects policymakers to begin decreasing the $120 billion per month purchases, and if all goes well to have completely stopped monthly purchases by mid-2022.

As mentioned in some of our prior posts this message has been floated by multiple fed presidents and Capital Markets seem to be taking this news in stride, much to participants and reserve members’ pleasure.

Much of the mainstream media seemed to report that there was no major change in policy or tone to which we disagree.  In listening to Powell especially in his interviews after the pre-plan reading of notes, he seemed much firmer and resolved to stop the monthly purchases and the tone in his voice in our minds, let us know if this would occur in the very near future.

As has been mentioned before many of our fellow professional investors have long desired this happened many months ago, but no matter, it appears that it is about to occur slowly and diligently, and capital markets are accepting.

On another totally different and non-market related and non-economic related topic several federal reserve members had transactions over the past year that were not optically good for the federal reserve. One of the members is our very own favorite Robert Kaplan who had multiple large transactions in securities that the federal reserve was involved.

While we will voice no opinion on this … Jerome Powell was very stern surprisingly, and in our mind so stern that it could be an occupational loss for some of these members. It will be interesting to see what comes out of this, but this is not the end of it and once again Powell was very angry and forceful on this point.

Bottom line we would expect a taper, slow lane of monthly purchases to commence shortly and will be watching interest rates which have already made some moves as well as capital market participation.

Have a Great “About to Taper” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents