Category Archives: Forecast

Q4 2023 J.K. Financial, Inc. Newsletter … Good News on Interest Rates for Pensions and Pension Recipients, What? … Don’t Fight the FED Are we Fighting the Fed? Yes … Important True-Up Reminders for Year End Deadlines i.e. 401k … Handy Cyber Tips and Tricks … RMD Age Date Changes and Others … By John Kvale CFA, CFP …

Welcome to our Video and Audio Podcast Review of our Q4 2023 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

Let’s get going! We hope you enjoy!

Q4 2023 Newsletter


Rate Increase GOOD for Pension Plans and Pension Recipients

Special thanks to Milliman and Rebecca head of medial relations for allowing us the ability to reference this fantastic data… also sourced at the end of our post/article.

Here are the top 100 pension plans, a lot of names you likely know and maybe even have a pension with… At least one family member included in this.

With higher interest rates, something we have mentioned numerous times… Notice because of a rather complex future liability projection, pension plans for the most part are FINALLY funded….YAY

2023 Corporate Pension Funding Study

By Zorast WadiaAlan Perry, and Richard J. Bottelli Jr. 20 April 2023

Don’t Fight the Fed! Wait, are we Fighting the FED? YEP

This unusual correlation especially when the blue line is going down, represents the FED (Federal Open Market Committee) pulling money from the economy or trying to slow the Economy.

Add higher rates, at the fastest pace ever….

Interesting that participants are fighting the FED, even though they regularly quote “Don’t Fight The FED!”

Stimulus still sloshing around in the Economy…

True-Up Reminders – 401k and the Like

In the year 2023 (Currently heading towards a close) the maximum amount WE (not including matching) can contribute is $22.500 and for those either age 50 or older or turning age 50 happily in 2023, you get a nice catch-up amount of $7,500 bringing your deferred amount to a whopping $30,000! 

Pro-Tip – Contribute evenly throughout the year, with a terminal amount of maximizing in late November or early December.

Pro-Trick – Similar to rushing/upping your contributions near the end of employment to maximize levels, if you are new to an employer and wish to maximize your contributions for the year, dump all you can to maximize your contributions now, with the intention of dropping that contribution level down to a normal level (see Pro-Tip above) after the turn of the calendar.  

Do Not Overfill Duplicate Plan Years

Remember, if you have contributed to a plan earlier in the year via another employer, your new employer will not be able to throttle your contributions back if you happen to go over the total annual limit. Reach out for help and clarity on this!

Be Aggressive in New Plans

Lastly, in new plans, starting from scratch with new contributions, allocation should be wide open and aggressive with the hope of choppy entry points as your contributions make up the majoring of the plan and will take advantage of the ups and downs in the early years of the plan.

Cyber Reminder- Tips and Tricks

If there’s one thing, for those of us with little time or patients for a long read that we would like you to take from this article it is that most cyber intrusions come from an e-mail that has a bad actor with a hot link click, do not click on that bad hot link!

The second thing and more encouraging, most cyber security situations are not extremely complicated and are allowed by a simple letting of our guards down- see above point!

  • Handy tip #1– Use an only known to you, phrase or password.
  • Handy tip #2– Do not ignore the recommended updates!
  • USB/Pen Drives a No No Avoid the USB/pen drive at all costs unless you absolutely, 100% know where it came from

RMD Age Changes and other Important Dates

RMD (Required Minimum Distributions)

One of the most important and likely most confusing due to the recent multiple updates is the adjustment of Required Minimum Distributions (RMD) They are now mandatory to commence for those aged 73. Those turning 75 after 2033, your new RMD age is 75.  Recall, these just a few years ago, moved from age 70 1/2 to 72, now to age 73 and eventually age 75. No wonder we are all confused!

Social Security Mandatory Commencement Date reminder age 70

The current maximum age that you may defer commencement of  Social Security still remains at age 70, well below the new younger thresholds that we hopefully are all feeling. 

The earliest one may take Social Security remains age 62, with a 25% discount to the full retirement age (FRA) benefit amount AND has a maximum earnings level of $21,240 from W-2 or 1099 (working income) not pension, investment or other non working types of income.  

Have a Great Fall! Talk after the turn of the Calendar!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.

Q3 2023 J.K. Financial, Inc. Newsletter … Rate Increases re-review Forward Looking Effects- Research Affiliates Robert Arnott 10 Year Expectations … What we are doing this Summer … By John Kvale CFA, CFP …

Welcome to our Video and Audio Podcast Review of our Q3 2023 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

Let’s get going! We hope you enjoy!

BREAK IN – The TDAmeritrade Charles Schwab merger will happen over Labor Day Weekend (September 5th, 2023) – Only Changes: Log in portal and account number – Expect (no reply) Legal Paperwork and emails!

Q3 2023 Newsletter


Looking Forward Now with Regards to Rate Increases

Three Articles Centered around this main leading Article –

In our main lead article, we discuss the look forward expectations of NOT lowering rates as soon as many think. With higher rates, cost of capital will be more expensive for many projects, giving the Federal Reserve the desired slow down in the Economy ! Hopefully, and not too much!

Research Affiliates Robert Arnott 10 Year Expected Returns

Take note of Arnott’s powerful firm with predictions of the slower/safer Bonds earning more than the good ole SP 500 like stocks, earning and inferior 10 year return- Lots of disclaimers of course!

Higher for Longer

Asset Allocation – What’s old is New Again (Wish I would have thought of this title for the Newsletter) – Bonds may be our new Buddy – Especially if Powell is to be taken at his word!

Slow motion Slowdown – It is likely not over yet

Sneaky stimulus remains and with the fencing of Banks, this has the effect of additional stimulus in the system!

A Day in the Life and Summer Plans

While we may not talk Wall Street talk, our days are full of watchful research and fun client interactions!

The return of what we are doing this summer finally makes its way back into the Newsletter – we hope you enjoy!

Have a Great Summer! Talk in the Fall!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.

REVIEW REWIND REPLAY – Shrinking the Balance Sheet Explained, Bulking and Lowering too

This post is clearly dated…. BUT it is actually what current chair Jerome Powell is doing today in addition to raising rates! Enjoy the replay review!

Last Wednesday Janet Yellen, FOMC (Federal Open Market Committee) chairperson released comments on their duty as Federal Reserve members but also introduced a term that may be new to many.

“Shrinking the Balance Sheet”

What is the Balance Sheet

Much to the happiness of all those bookkeeper, accountants, CPA’s and the like, present party included, entries must balance.  Even the US Government as huge as it is, runs by the old adage

Assets = Liabilities + Equity

A basic accounting principal, that MUST always work…

If a change is made, it must be counted somewhere else, even on the USA’s balance sheet.

Bulking up the Balance Sheet

Post “Great Recession of 07-09” FOMC members smartly embarked on a successful but unknown effort at the time, of infusing banks and capital markets with Greenbacks aka $ Dollars!

The Federal Reserve led by FOMC members, with the click of a button created money in their checking account and created a contra account for balancing purposes then went out to capital markets and bought bought bought in HUGE quantities various capital instruments, but for the most part US Bonds of all maturities.

Their goal, again unchartered territory at the time was to infuse money into the system and also lower interest rates.

By  purchasing large quantities of instruments the FOMC were putting dollars directly into the system … there were other programs as well, but for the sake of simplicity, their buys pushed money into, at the time, a much needed financial system.

The numbers of this chart are not as important as the line and dates.


As the FOMC clicked and bought and clicked and bought again in keeping their books “Balanced” the Federal Reserve Bank Assets Grew and Grew.

Finally the Sizzle, Shrinking the Balance Sheet

Take a peek at the far right of the line in the chart… Come on now you can do it …. this is important, and you have come this far …

What do you see? It’s flat lining….

Since most of the FOMC purchases were bonds of various types, and bonds mature, that line should begin to decrease. The FOMC holds such a huge portfolio of bonds, maturity occurs almost constantly.

Until now, the FOMC has re-invested or repurchased maturing bonds with new bonds, thereby holding that line flat. Yellen and crew are now signaling they may NOT re-invest those maturing bonds, which would lead to a VERY SLOW decline in the FOMC balance sheet or a …

“Shrinking of the Balance Sheet”

These words have been carefully chosen. Eventually the FOMC may actually sell their bonds back into the capital markets, reversing the stimulus applied in the “Great Recession of 07-09” more quickly. That would not be called “Shrinking” that would be called lowering, reducing, or something similar, look for this type of cryptic rhetoric in the future …. for now, shrinking simply means letting the maturing bonds mature and NOT re-investing … Shrinking the Balance Sheet !

There you have it, this post turned longer than expected, but the background should have made for a clearer picture … if you made it this far, pat yourself on the back… You now know the current “Shrinking” step along with likely future announcements by the FOMC and committee members!

Have a Great “Deciphering Cryptic FOMC Rhetoric” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.

Bond Market Beats its Chest … Invertedly/Upside Down Yield Curve …. R – Word Predictor (Recession)

Some on Wall Street say the Bond Market is the smartest due to the fact that participants are only focused on repayment risk and time of that repayment. Compared to the Equity (Stocks) market were there are flows of capital, tons of complication with financials and mood swings by participants.

Given the Bond Markets high IQ status, when it speaks people listen….

Inverted Yield Curve as Bond Market Beats it Chest with a Warning

As a quick refresher, a normal yield curve will have lower rates for shorter terms and higher rates for longer…. simply because the longer the term the greater chance of a problem/stress/default …

Pardon my free hand, but it looks like this… the longer the time the greater the cost/interest rate

When the Bond Market turns upside down/inverts, it has a very good track record of predicting a R- Word!

Note on this long term chart, as the line drops below zero, the Bond Market is Beating its chest and inverting…. also note the grey area that follow are R-Words…

Using a shorter term chart, last week marked a strong inversion of about -.25% and closed the week off at -.20% note those are point 25% and point 20%…. far right below the line…

So it looks like the R Word is in the cards, not to worry we have been talking slowdown since December of 2021… so we are prepared….

Remember, Equity Markets are forward looking and will sniff out the recovery before it is seen…. Also, recall, headlines are the worst near the end…. Still a Ways to Go though!

Next up — Why the Fed is in a pickle and may only have an R- Word way out!

Have a Great “Inverted Yield Curve” 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.



Thoughts from Barry Habib, Housing and Mortgage expert, from this year‘s 2022 Mauldin SIC Investor Conference…

For those of you with a memory like an elephant, congratulations, you may recall that we have delightfully attended the Mauldin Strategic Investor Conference (SIC) virtually during lockdown for the past two years. As a side note, a conference that we had never attended before due to the duration and the timing … very near tax time!

Good news, once again this year the conference was virtual and we are happy to attend.

While there were 40+ speakers, more to come on others, we found the following expert and presentation very interesting, if not somewhat controversial.

Barry Habib, Mortgage and Residential Housing Expert

You may recognize Barry as he is a regular speaker on many of the financial channels among other and was a presenter at this year’s SIC conference.

Cutting to the chase, Barry expects a recession later this year or early 2023 and as such expects mortgage rates in particular to drop precipitously from their current 5 1/2% rate along with all rates of other asset types.

These expectations, (forecasts), are certainly more economic and financial market related, as such we will make note as predictions and check back sometimes next year.

Now, to Barry’s wheelhouse, what we are all interested in, the expectation of housing appreciation or depreciation!

Understanding that Barry comes from a residential and mortgage background, so let’s be transparent that there may be some innate biases, but his expectations are for mid to low single-digit housing appreciation for this year 2022.

This flies in the face of many forecasters due to the aforementioned slow down or R- word recession and more importantly the heightened interest rates of Mortgages currently.

In Barry’s defense, lack of supply and his expectations of a sharp reversal in mortgage rates will lend itself to this continued growth.

Heck if housing prices hold their values we would consider Barry’s prediction a win.

There will certainly be pockets of strength and weakness across the country…

We will be watching as it’s very easy to monitor and will let you know!

Barry …thanks very much for a fantastic presentation and for the information duly noted…

Have a Great “Housing Analysis and Forecast” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.



Capital Markets Pre-Empt Interest Rate Hikes … Amazing Correlation of 2 Year Treasury Bond and Fed Funds Rate …

FOMC (Federal Open Market Committee) members use the very short term Federal Funds Rate (think interest on your checking account) to help throttle the economy. When it is too hot they raise rates. In Paul Volcker’s case to almost 20% way back in the hyper inflation days. When the Economy is struggling they lower rates, as of late to zero, both post Great Financial Recession and the most recent Virus induced mini-recession.

There is an interesting predictor or front runner of the FOMC interest rate movement, sparred by the very short term fixed income traders, specifically the 2 year Treasury bond.

Markets Pre-Empt FOMC Rates

The chart below is of the Two Year Treasury (Red Line) and the afore mentioned FOMC Fed Funds Discount rate (Blue Line) –

The correlation is so strong it is almost hard to even see there are two lines….

Zooming into a shorter time frame of just 5 years, not only can we see the difference, but in looking over to the right, the markets are predicting multiple rate hikes in short order, at this time!

Will see if this holds, but as mentioned in our post earlier this week here, Economic number and the markets are expecting rate hikes!

Have a Great “FOMC Rate Correlation” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.



Updated Comments on CPI (Consumer Price Index) aka Inflation … Is it Still Accelerating or Not?

Last week the FOMC (Federal Open Market Committee) led by chair Jerome Powell at a regularly scheduled meeting and post meeting Video Interview, aggressively commented that they are going to wind down the monthly purchase of fixed instruments and plan on raising short term interest rates to thwart the inflationary pressures, mainly the backward looking CPI (Consumer Price Index) readings reported by the BLS (Bureau of Labor Statics) …. On a side note, ever notice how darn many acronyms are used in Economics….OK digressing…

We can debate the source of the inflationary pressures, supply chain, wages, oil or other matters…

On that note, here is the link to the BLS weighting of the CPI, it is a measly 320 lines long…. complicated to say the least…

But there are possible signs of a slowing already…

Certainly cannot see it in the year over year data below….

But the monthly change in CPI looks a little different…

Not making a call, just an observation… We will be watching!

Have a Great “CPI Updated” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.



CPI (Consumer Price Index) Prints 6.8% Year over Year Increase, Quick Analysis on Likely Peak … Friday

About three hours ago, the BLS (Bureau of Labor Statistics) released their November 2021 report on CPI (Consumer Price Index) one of the broadest measures of Inflation…

If you have noticed your grocery basket smaller and more expensive, this is why….

This report has a ton of factors in it, as can be seen at the top of the chart from the BLS report, below….

The year over year print was 6.8% increase!

A very large portion of the CPI is Energy…

Have you noticed a LOWER bill to fill your tank lately?

The BLS report is lagging, below is a current Oil price, which is over 10% LOWER currently… hence the cheaper refills…

Very likely peak in CPI as measured by the BLS, next month which will be released in early January, we will take a peak and keep you updated…

Ok, another slightly heavy Friday, BUT the FOMC is watching this very closely and making decisions based on this increase, which may be peaking/lagging already…. Let’s stay tuned!

Have a Great “Friday CPI Analysis” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.



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.



Reviews of FULL Two Days of Virtual Gathering…. Cyber, Inflation Transitory NOT, Interesting Fatigue from Event…

Last week the team happily carefully gathered and divided to maximize our time at a two day Virtual Conference that is usually “In Person” lasts about a week, and is located in alternating years on the West Coast and then the East…

The conference lasted two days (Tuesday and Wednesday 10 am-3 pm) and was a straight (small morning break of 20 minutes, but no lunch break or bathroom break) five hours each day, with overlapping events except for several “Main” general sessions such as a talk with Ben Bernanke….

The method of attack was for each of us to choose what looked the most interesting and if there was an accidental overlap of desired events, one change to a different session. Oddly, and maybe this speaks to each of desires and roles, we rarely overlapped… there were a few sessions that were “Full” , for the record not sure how a virtual session can get full, but oh well…

As of this time, the sessions are not up for post live review so our review here is part for our own notes (living diary) and mostly for your shared knowledge …

Cyber Threats and Interesting Home Threat Note

Regular followers know we take Cyber security VERY seriously, and just by chance yours truly ended up in lengthy Cyber Security sessions on both days.

Key Takeaways from an office standpoint were more two factor authorizations (extra step of logging into important programs that includes a text to cell)

For the record over the weekend after telling the team last week “I always have my cell” a chance package delivered to the office led a trip up to the office with the cell in the car and the need to log into an important program….. Guess I DON’T always have my cell…haha

A new interesting reminder for those that work from home at all was a statement “If your home router is older than three years and especially if not a commercial router, you may be unsecure!” This of course led to a quick review of each of our home set ups with the note of having a now 14 year old gamer, and a complete security review of all at home security was completed…. just for extra security additional security was set up along with a special at home “Guest Wifi” rather than the family’s for friends who may carry unwanted programs into the network…

Inflation Less Transitory than Thought

Jerome Powell, chair of the FOMC (Federal Open Market Committee) during a speaking event last week mentioned that the coming inflation may be less transitory than initially expected…

Recall this was the main debate at the Mauldin SIC conference early in the Second Quarter as mentioned here and in our Q 3 2021 Newsletter..

Several guests, most notably Lizanne Saunders echoed this thought during a fast speaking opening session…

The basic thought originally was the CPI line below would roll over quickly, now more are thinking it may last longer, especially with the afore mentioned FOMC on record to allow without intervention…

Interesting Observable Fatigue from Event

This was one our first events of this length and without much of a break, we all noted an interesting (high) level of fatigue. It seems like there would be no reason for any tiredness given sitting in front a computer for 10 hours in two days, but is sure was.. heck we were not participants, only observers…

Will keep a tab on this moving forward, sure others have experienced the same, but our first notable occurrence.

Have a Great “Virtual Conference” Update!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.