September 2014 Review: Monthly Financial Planning Tip, Capital Market and Economic Overview

Welcome to our monthly Economic, Capital Market, and “hot off the presses” Financial Planning tip of the month. Once again a special thanks to all of  YOU … the best clients and friends as your experiences have again given us the subject matter for our Financial Planning Tip of the Month.

For those new to our writings, we touch on the most pertinent Economic and Financial “stuff” along with a video of my mug that has even more specialized details of the latest month as well as this post.

Let’s get going !

PSSST …. Hope you like our neat new intro to the video too!

 

VIDEO

You Tube Direct Link   or   Vimeo Direct Link

Itemize special items on Your Homeowners Insurance

  • Jewelry
  • Paintings/Art
  • Rugs
  • Any special/unusual valuable items

If you have anything out of the ordinary, check with your homeowners carrier to see if it needs to be itemized. Not to worry, in most cases the premium will not rise much if any, BUT if you forget to itemize and theft, destruction or a loss in incurred, you will be sorry.

Most carriers only ask you let them know you have something that needs itemized … if they do not know, they will most likely only pay a more normal relative fair market value of the item, possible far below the true value.

Ok, so you didn’t see our writings before the loss. It’s not all bad news, would you believe, you can deduct personal losses from your taxes ? Yep

Here is the IRS ruling, just be aware, there are certain hurdles you must jump … all worth jumping to help offset the pain of our loss with a tax deduction!

Too Strong US Dollar … huh ?

Don’t look now, but those claiming the end of the US Dollar as the world reserve currency have to think twice.

Why the strength?

  1. Russia/Ukraine conflict
  2. Broad weakness across the world EX USA
  3. More other countries currency falling than US strength

Chart of the US Dollar against a broad basket of world currencies

US Dollar Basket 9-30-14

Positives:

  • Oil: denominated in US $,  downward pressure on price
  • Imports less expensive
  • Good time to travel abroad

Negatives

  • VERY tough on exports(ers), less price competitive
  • Headwind for all non US countries
  • Tough for foreigners to buy, travel or spend here in US

It is not the TOTAL appreciation of the US currency, but the speed at which it happened … J.K. Financial, Inc.

 Average  Hourly Earnings

Today’s Top Economic Indicator

Avg Hourly Wage Growth

I am beginning to think this is one of the Holy Grail charts of our slow recovery. This recovery has been so slow to feel any pressure on wages, consumers are beginning to feel tapped out.

Consumer Confidence Drops Unexpectedly

Consumer Confidence 9-30-14

Because wages have not increased with inflation pressures, consumers are taking a pay cut. Consumer confidence is a driver of our economy.

Higher Consumer Confidence = Higher Spending (GDP 70% consumer) = Higher GDP

Keeping careful watch!

Have a Great Day!

John A. Kvale CFA, CFP
www.jkfinancialinc.com
www.street-cents.com
8222 Douglas Ave # 590
Dallas, TX 75225
 

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