Fourth Quarter 2017 Cover Letter Review – Private Policy

Do you recall the last time you went to a movie, maybe even begrudgingly, because expectations were low, but the movie turned out good, making for a wonderful surprise? Starting out the new year of 2017, most, including us had minimal expectations for the year 2017; A bad movie.

What If We Already had a Bear Market?

In our “What if we already had a Bear Market?” article in the coming Q1 2018 Newsletter the early 2016 drops across most asset classes except the more popular ones were 20% to over 30%. While markets don’t usually repeat, they often rhyme, again setting low expectations for the 2017 movie.

Sleepy VIX

Not only did we not start out bad, (Good Movie) but we may have just experienced a generational “Fear-Less” year. In our record breaking low “VIX Fear” article again in our coming Newsletter, a reading less than 10 on the VIX (Volatility/Fear Index) had occurred just 9 times over the last 26 years. Our surprisingly good movie year recorded 53 end of day VIX closings below 10, five times as many as ever recorded. Good movie.

Interest Rates

Post great recession of 2007-2009 most expected the FOMC (Federal Open Market Committee) controlled rates ascent to begin moving back up as they always did through history. Thanks to a stubborn, data watching, Janet Yellen (FOMC Chair) rates have been correctly moved up gradually. The current Federal Funds rate was increased 3 times in 2017, once in December to the targeted level of 1.25-1.5%. Officials are on record for another 3 moves or .75% in the next year, gradually pushing rates nearer their more normal historical levels.

Janet Yellen will be leaving her post next year and we look for her replacement to continue on the transparent, methodical, data watching, path of rate increases that keep market participants personal VIX/Fears in check.

Next Year’s Movie?

Looking into next year’s movie, we think it is healthy to have a conservative view again. We are not predicting or welcoming a bad movie, but just staying vigilant! Good movie or bad, we will be prepared.

In Closing

Your Fourth Quarter 2017 summary is enclosed on the front page of this report we have included our most recent investment allocation from your Investment Policy Statement. This is also the time we attach our Private Policy Statement for the year along with our opportunity to offer our latest ADV filings; Requests for review will be accepted via phone, mail or email, and mailed immediately upon request.

John A. Kvale CFA, CFP

PRIVACY POLICY NOTICE

Our Promise to You

As a client of J.K. Financial, Inc., you share both personal and financial information with us.  Your privacy is important to us, and we are dedicated to safeguarding your personal and financial information.

Information Provided by Clients 

In the normal course of doing business, we typically obtain the following non-public personal information about our clients:

  • Personal information regarding our clients’ identity such as name, address and social security number;
  • Information regarding securities transactions effected by us; and
  • Client financial information such as net-worth, assets, income, bank account information and account balances.

How We Manage and Protect Your Personal Information

We do not sell information about current or former clients to third parties, nor is it our practice to disclose such information to third parties unless requested to do so by a client or client representative or, if necessary, in order to process a transaction, service an account or as permitted by law.

In order to protect your personal information, we maintain physical, electronic and procedural safeguards to protect your personal information.  Our Privacy Policy restricts the use of client information and requires that it be held in strict confidence.

Client Notifications

We are required by law to annually provide a notice describing our privacy policy.  In addition, we will inform you promptly if there are changes to our policy.

Please do not hesitate to contact us with questions about this notice.

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