Category Archives: Education

December 2021 Financial Planning and Capital Market Review – By John Kvale CFA, CFP

Hello and Welcome to our December 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 thoughts and current events!

Hope you enjoy!

December 2021 Video

YouTube

Financial Planning Tip(s)

First In Back to Basics Series – “The Emergency Fund”

In the inaugural post of a neat (well we think so) new idea, here in our Back to Basics series we discuss the all important Emergency fund.

This series is a review of the basics, and will serve as somewhat of a semester study of the Financial Planning foundations all the way to more advanced topics later in the series…. We plan on a mid month release of each part and somewhere south of double digit parts…. possibly with a video added to each for additional insights…. thanks in advance for sharing with those who may find this series helpful….

With the FOMC holding rates low currently, we remind that the Emergency fund is NOT investment funds, and as such may earn little if any interest in the current environment…. but that is ok, it needs to be safe, safe safe and very liquid!

We also discuss the size of the Emergency fund, depending on your situation!

FHFA Raises Conforming Mortgage Loan Amount

This post came to us due to the much larger than normal increase in the confirming (non-jumbo) loan increase amount. We have spoken at length on inflationary increases in a variety of assets, this includes homes and this much larger than normal increase in the non-jumbo Mortgage amount to $647,200 will be helpful in allowing more entry to many into the Residential Housing market, here is the actual article. and here is the link to the FHFA announcement…..

Capital Market Comments

Interest Rates and the FOMC – On Two Different Pages at Time of Post

With such importance on interest rates, the possible raising of the rates and the FOMC’s (Federal Open Market Committee) adjustment of rates…..

This post on FOMC’s rate increases, versus what the Markets are pricing in, was at the time very different. With Markets pricing in an increase in mid year of about 20% and AT THE TIME FOMC members saying a late 2022 if at all increase.

Fast forward to today and both the markets and the FOMC are saying a 60% increases in the Fed funds rate around March may be in the cards…. hmmmm

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

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

NFT’s (Non-Fungible Tokens) … Explained … Ecosystems

We are certainly not recommending these as an investment, but we are watching the development of NFT’s and as such, thought it worth giving you a little background on them… of course a great chart from our friends at Visual Capitalist set us on our way….

NFT Definition

This from Investopedia

WHAT YOU NEED TO KNOW

  • NFTs are unique cryptographic tokens that exist on a blockchain and cannot be replicated.
  • NFTs can be used to represent real-world items like artwork and real-estate.
  • “Tokeninzing” these real-world tangible assets allows them to be bought, sold, and traded more efficiently while reducing the probability of fraud.
  • NFTs can also be used to represent peoples identities, property rights, and more.

NFT’s and Their Ecosystems

This great Chart from our friends at Visual Capitalist:

What are NFTs? The NFT Ecosystem, Explained

Have a Great “NFT’s Explained” 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

Bond Markets and Participants Say Raise Rates Mid 2022, FOMC Says WAY later (EOY 2022), Who is Correct?

Why this is important? Bond Markets are signaling a much faster interest rate increase(s) than Fed Speak… Someone is going to lose this game of chicken… Only time will tell us who?

Frequently, Wall Streeters (my nick name) are quoted as saying the smartest guys in the room are the Bond Markets/Participants.

Some of this rhetoric comes from the simplicity of a bond. Basically you have a time to payback (term) and risk of the asset (Quality i.e. Aa to junk).

With less to focus on, bonds and their players/participants are thought to have greater clarity…. However, in recent years (working on a decade now) the FOMC (Federal Open Market Committee) led by Jerome Powell currently, have been making direct purchases of bonds, causing possible distortions and lack of true free market discovery….

Well Maybe!

Recent Two Year Treasury Yields Rise Dramatically

Throwing water on the theme that the FOMC has taken TOTAL control of the bond market, this recent move in the 2 year treasury is signally to the FOMC by bond folks, they expect (and want) rate hikes sooner rather than later….. Hmmmmm

CME (Chicago Mercantile Exchange) FOMC Watch Tool

This neat CME Fed Watch Tool … overlays the current interest rates with a graph to show an expected increase time probability…

The way to read this chart is the orange represents the chance of a FOMC rate increase… March of 22 showing about a 20% chance of a FOMC rate increase….

Push forward to June 22, just two months later, and the probability of at least a .25% increase moves to about 80%!

The thing is, the FOMC is saying maybe one increase very late next year (2022), but certainly not the bond market/participants.

Wait too long and the FOMC may miss their chance to raise … raise too early (not likely at this time) and it could cause an unexpected headwind for the economy.

Let’s grab some popcorn and see who wins this tug of war!

Have a Great “Fed versus Bond Market” 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

Solar Power by Country 2021, How Solar Panels Work Animation … Neat Education for Possible Energy Production of the Future

With a Holiday shortened week and being out of the office … we still could not keep our fingers off the keyboard….

After multiple talks recently about Solar, Solar Panels, Use, and the Creation of Solar Power…. this neat chart from you guessed it our friends at Visual Capitalist here hit our in box….

With a quick search on YouTube, a neat how panels work video follows at the bottom….

Solar Power by Country

Here is the top ten detailed breakdown…

As mentioned above, this animation from a neat YouTube site called Lesics and explains how Solar Cells work.

Have a Great “All about Solar” 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

New York City Clever Then (19th Century) and Now Eye Glass View from Friends at Visual Capitalist

If you really want to have some fun with this, the website link below will let you scroll over all of New York at it is today and through the glass eye as it was in the early 19th century… or vice versa as shown in the last picture here…

Another terrific presentation by our friends here at Visual Capitalist …

Three Screen Shots of New York, Then and Now

Have a Great “New York City Then and Now” 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

Candid Comments and Background Discussions with Legendary Real Estate and Business Creator Sam Zell … From the Grant Williams Podcast Series

As the professional podcast interviews for investors continue (this new found form of listening to long form personal visits) a most recent interview of famed investor Sam Zell hit the airwaves.  Sam is candid, entertaining, humble, some what self deprecating and very interesting as he outlines his successes, failures and a few good ideas we could all add to our persona. This from the fantastic Grant Williams Podcast series.

On a personal note, after receiving permission from Grant to produce this and his statement to share with his vast network, the pressure is on for a good post… hope it lives up to the standard!

Hope you Enjoy reviewing as much as the creating of this post.

Sam Zell, Candid, Open, Background.. Take Aways’

A first question right out of the gate:

Do you see echo’s to 2007 and/or bubbles? 

Yes, some inflation and not sure if it is transitory, but not necessarily bubbles. Tons of pressure on wages and do not know where workers have gone, but they are not there.

Zell on dealing with labor inflation…

Able to do lesser staffing without customers complaining. Expectations of service and services are going down.

Recent conversations about supply chain issues…

“A year ago, people would tear their hair out, but today an acceptance!”

Inflation thoughts…

“Inflation is an event and mindset!” So far only an event and has not turned into a mindset…. Yet.

Ask for a big enough price increase so you do not have to go back and ask again (specific to hospitals he owns, but good for all types of businesses.)

Background, childhood and education …

Immigrants son, born three – four months after coming to this country. Family fled Poland. “My Dad felt the streets of USA were paved with gold, due to opportunity!”

Tough family that was told to study and work hard. Sam not a great student.

First job, bought a Playboy for 50 cents in the city and sold it for $3 to his friends back in the burbs…. Starting his own import export with maintaining margins.

While Students in school, offered to let Sam and a friend stay for free if they would manage the building. Soon were managing a dozen of buildings while completing Law School.

Had 43 interviews and 43 rejections post law school graduation.

Finally accepted and offer, and four days later went to his boss

“This is not a good use of my time!” and his boss allowed him to go, but also asked to invest with him as Zell went back to real estate.

Zell on Business and his success and failures …

Self Confidence was very helpful in accomplishing his goals.

Businesses have changed every 3-5 years as no matter how good idea is, someone will copy.

Always very cautious towards risk and understanding things.

“Competition is great, for you … me, I want a monopoly or at least and oligopoly.” Too much competition is bad.

Example of We-Works… Zell watched from the 1970’s and all went bankrupt because at some point over supply kills the model.

In order to be the best, keep ideas simplistic and being scared, and willingness to let a great deal go by. Many times being wrong, but that is ok.

“Give me a guy with motivation and average IQ and I will turn him into a successful business leader!”

Build a better mouse trap and more will come to it, not true, everything is sold as an idea.

Staying Power is the name of the game… No surprises!

Given the high valuations of today, have you changed the way you do business?  More cautious and conservative.

How do you narrow your deal opportunities?  Do not see or do any deal that Zell does not understand. Does not want to run a business, but have had to over his career.

If you cannot tell me everything I need to know in two sentences, it’s too complicated.

Successful ideas, do not require multiple steps, just conviction and understanding and recognition the shortest distance is straight between two lines.

Real Estate Industry has a long history of lack of discipline. Appears safe and people let their guards down and then trouble.   

No one has ever proved that scale works in Real Estate. Do not be afraid to be a small profitable company rather than a big less profitable, not all companies should be big.

Discipline keeps Zell safe.

Real money by long term holdings, be patient.

Mentions a company sold after holding for 37 years and another for 20 years that were not always profitable every year, but over longer term very successful. Sustainability is often times more important than constant success.

If market timing is selling something that some one will pay you too much for, so be it, next.

Many investors are assigning no risk to certain hard assets today, but history shows that is never the case, there are always risks.

Will you slow down?  People ask me that all the time…”Slow down from what…I like what I do,”

There you have it, thoughts, habits, beliefs and ideas from a legendary investor…. some of which we could all integrate into some aspects of our life!

Have a Great “Sam Zell Review” 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

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

Why You May Want to Register Your Name on Multiple Email Providers Even if You Do Not Plan on Using that Service!

With the proliferation of spam, cyber attacks and just some bad actors out there, it may be a good idea to register your name as well as your family members name for your own safety…

We have registered all of our family names on the big five at the time of registration, gmail, hotmail, outlook, yahoo and icloud…. these are no longer the biggest…see below

Even if you do not plan on using the provider, it may make sense to register so some “bad Actor” does not pose as you…

Ok, we get it, with a weird last name like ours, it was not that hard, those with more normal names may have a tougher time, but you may still want to try…. bad guys are not going away!

The Largest Email Providers

The following is a snap shot of the last frame of this neat graphic from Statics and Data

Not sure if any of you noticed the last few videos are not coming through email notification well…but we did… and it is currently being fixed….

Hence the Snapshot, we know that will work…

Here is the actual embedded video… if you see a video, it has been fixed, if just a link, not fixed yet…

There you have it… another in our Why series AND a light, fun and hopefully helpful post labor day article!

Have a Great “Register Your Name on that Email” 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

The US Dollar, Trading Pairs, Exchanges, Foreign Holdings …. Very Dominate!

This chart popped into our in box earlier this month and is a great example for those that may wonder just how dominant the US Dollar is around the world.

It is easy to find folks that worry about the US dollar and it’s reign as the world currency….

Of course, anything can happen, but the following Chart shows is dominance at this time.

US Dollar Usage, Trading Pairs, Exchanges, Foreign Holdings

From our Friends at Visual Capitalist

Have a Great “US Dollar Update” 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