Category Archives: Investing/Financial Planning

Federal Reserve Preview, Month End Next Week (Fast Month!) … Friday … Ryder Cup Weekend

FOMC Preview

Knowing the FOMC is at an inflection point on changing posture (Monthly Asset Purchase slowing i.e. Taper) we have paid greater attention as of late in order to keep our own thoughts as clear as possible and actually avoided much of the main stream analysis for the very same reason….

Next Week we will dig into the FOMC’s most recent statement and discuss Jerome Powell’s virtual post announcement interviews with reporters… there were some juicy stuff to review, actually not associated with the FOMC’s statemen.

Month End Already- Wow…

Several Months last year seemed to drag by so slowly, you would think they are never going to be over… Not this year, it is flying, just the way we like it, busy, fast, fun and furious!!

Next week is the end of the month, we will have our Newsletter Video, the afore mentioned Fed talk and possibly the end of the month video too…. Haircut time.. haha

Friday Ryder Cup

Ahhhh, but today is a Friday heading into a US versus the other guys weekend of Ryder Cup

Enjoy your Friday and your 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

Seasonal Patters Exist, Farmers Almanac, Traders Almanac

Growing up on a farm, we were always conscience of the coming season. The change would come whether we liked it or not (never big fan of the dark months ..Feeding the Cows in the dark, Ice Storms, Sleet, Brrr) but we knew they would eventually come and if we did not like the coming season it would eventually work its way through on to the next season.

This was tracked by The Farmers Almanac!

Of course we never knew just exactly when, how bad … and sometimes it would even seem like it was not coming, but it would… frequently of differing severity, but at the absolute least rhyming with the season from the prior year.

Just like Summer, led to fall and fall to Winter and so on…. believe it or not, Capital Markets have seasonality too!

The Traders Almanac

Not living on a farm anymore, and having a fun occupation that entails Capital Markets, it is worth noting of the Seasonality of Capital Markets….

According to the Traders Almanac October followed closely by September are the worst two months of the year…. among many other seasonal patterns…

  • Mutual Fund End of the Year Occurs during this period
  • Public Company Final Quarter projections confession
  • Lack of Cash Flows Due to Nearing the End of the year
  • Black Out Periods of Buybacks due to earnings season
  • Religious Holidays
  • Quadruple Witching (Expiration of 4 Different Options Type contracts) One of largest ever last Friday

Any or all could be the reason some or maybe none…..

Pair this with extended valuations which we have been beating you with and maybe a FOMC that is sending smoke signals of tapering asset purchases….

It may be bumpy for a while….

But guess what?

Just like knowing on the farm that in December the days began getting longer, November and December are “Seasonally” the best months of the year for Capital Markets …. of course there are exceptions (2018) …

Stay buckled, we have you covered but there may be some turbulence if seasonality holds!

Have a Great “Farmers/Traders Almanac” 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

Back to the Office? Not Yet, Kastle Back to Work Index Update

One of our first and favorite finds of interest over the last year and half, the Kastle Back To Work Index.

This index, created by Kastle an office security among other things company (what a clever way to use resources) references multiple city indexes as well as the average on all the cities they cover..

Great progress, with a bit of curving over as of late…. Not back to 50% yet on any of the areas they produce tracking data.

Total Average of just over 30% back at the office, again with some decreases of late. On a personal note, we have had multiple large industry related gatherings switch to virtual as of late!

Will be interesting to see how long it takes to get back to “Normal” and just what that looks like?

Have a Great “Back to Office 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

New Tax Laws … We are Reviewing … Friday

Did not want to scare you with the title of this post…. after all it is a Friday!

The initial new tax proposals have finally been released and we are on them…but not too deep as of yet!

For the record the initial proposal is not too terribly strict …. Certainly not near as strong as some of the headlines you may have seen!

Keep in mind, these are PROPOSALS and will be different once in law….. but we like to get a jump start on things for planning purposes… but NOT take actions until set in stone/law….

Friday

With a big week of posts, we will let you off easy … No Promises for next week!

Be good, be well, be safe, and Enjoy your Weekend and Friday!

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

1040 Estimated ES Quarter 3 2021 Tax Due Date Today!

Today is the due date for Quarter 3 2021 Estimated Taxes!

Between the last two years of jockeying the dates for regular returns and filings, and the odd timed ES filing (note below Q 2 is only a two month gap) if you have forgotten or are off on your days…. do not worry you are not alone.

While the postal system is getting better, as mentioned here it may be a good idea to file your ES both Federal and State Electronically!

This is the exact link to the Federal deposit site do not want bad guys jumping in front of your browser, make sure your browser gets to this link.

https://www.irs.gov/payments/direct-pay

Looks like this:

We know many of you are old fashion and want to send it via coupon and mail, no worries, just make sure it gets in the mail to be postmarked by tomorrow and use that handy cell phone as your scanner and take picture of the coupon, check and envelope for proof if there is a delay!

From Publication 505 from the IRS

Link to publication

From Page 26 of the Pub 505:

For the period: Due date:
Jan. 11
– March 31 …….. April 15
April 1 – May 31 ………. June 15
June 1 – Aug. 31 ……… Sept. 15
Sept. 1 – Dec. 31 ……… Jan. 18, next year

Form 1040 Instructions : ES Coupon Page 11 and Fillable

Here is the link to the IRS booklet that has blank ES Coupons, specifically Q 3 is on page 11…

Again, the booklet is fillable for those such as myself who’s handwriting has fallen off a cliff in clarity! haha, not kidding!

Have a Great “ES Tax 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

Robert Kaplan Dallas FOMC President Town Hall Analysis and Update, New York President Williams Chimes in, Wall Street Journal’s Favorite Fed Reporter Too – Taper Transition to Begin

While not sure why all Federal Reserve Chairs do not do this type of event … there are an even dozen Fed Banks scattered across the country for roots in various geographic areas, we are very happy our local favorite, Dallas’s own Federal Reserve Bank President, Robert Kaplan has started his own town hall event.

Think this is our third or fourth attendance, with the first as mentioned here, becoming an accidental question…

Incidentally at this event, the first three questions were from acquaintances… Great Minds I guess!

Another Robert Kaplan Town Hall Update New York Fed Williams Chimes in

The most important item mentioned in this town hall was that Kaplan supports a taper of the 120 billion monthly purchases of Mortgage and Treasury bonds as soon as October, with an announcement in two weeks at the September 22, 2021 Fed meeting.

Luckily with the delay of the weekend to produce this full post, New York Federal Reserve (debatably the most powerful bank) Chair John C. Williams in a speech via video conference to St. Lawrence University said the following:

“There has also been very good progress toward maximum employment, but I will want to see more improvement before I am ready to declare the test of substantial further progress being met. Assuming the economy continues to improve as I anticipate, it could be appropriate to start reducing the pace of asset purchases this year. I will be carefully assessing the incoming data on the labor market and what it means for the economic outlook, as well as assessing risks such as the effects of the Delta variant.”

Wall Street Journal’s Go To Reporter Pens Friday Article

Then the following story hit the Wall Street Journal Friday, September 10, 2021 by the Fed’s favorite go to reporter, NIck Timiraos..

NIck runs with a November 2021 Taper Transition and a 15 Billion per meeting drop off from the current 120 Billion monthly purchase…

What to Watch – Longer Term Interest Rates, Markets Themselves

If this is true, and the FOMC does begin taper, we will need to keep a sharp eye on interest rates, especially the longer end i.e. 10 year treasury.

Near then end of 2018, the FOMC began lowering asset purchases AND raising rates at the same time… Markets protested with a sharp 20% drop, causing Fed members to reverse course.

Kaplan and other officials are reiterating that just because the Taper may begin, interest rate increases are not on the horizon yet.

Recall in our very recent Kyle Bass review, where Fed officials are known to carefully watch the Capital Market reaction to their comments. If as true as Bass thinks, Fed officials will be watching close!

Other Kaplan Notes from the Town Hall:

  • Delta hurting travel, and leisure, Dallas Fed US GDP estimate 6.5 down to 6 because of delta
  • Slow workers with Jobs, Aug jobs number not surprised Sept slower than expected, JOLTS showing work avail, fear of delta keeping away,
  • 3 mill folks left workforce since 2-20, 1.5 milion left for care of kids – matching problem work
  • Supply demand on materials,  PCE will be 4% PCE headline will be 2.6% 2022-
  • Economy recovering slow Q3 but still growing, 3% inflation 2021
  • Economic Fits and starts bc delta- vaccine, booster, masks help but
  • High frequency mobility data not falling, folks adapting and managing through
  • Business expect supply demand last longer than thought
  • Worker demand higher pay, higher absence, reluctant to come back to labor force
  • Mid to small business tougher time with employee—Larger Businesses more flexibility
  • Broadly all businesses raising prices and they will stick

Apologies for the length of this post … this was a combination Reporter, notes and collection of various data points…

A smooth transition is very important, and long desired by many in the investment community, buckle up and let’s see how it goes!

Have a Great “Smooth Taper Transition” 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

Kaplan Town Hall/Newsletter Preview Breaking News … Friday … Sports Begin …

Another Fantastic Kaplan (Dallas FOMC President) Town Hall

On Wednesday evening of this week, Robert Kaplan did another Town Hall …. Pretty sure this is our third or fourth to attend so there is some continuity working as we can hear changes, continued thoughts and just a general getting to know Kaplan…

The most BREAKIN NEWS from the talk, was Kaplan saying the following…

“If there are not major changes in the Economy before our next meeting on September 22, 2021, I will suggest taper is announced and it begins in October of 2021!”

This was a big (so soon) enough statement that we were surprised not to see any public media discuss yesterday….

We will dig into Kaplan’s comments next week in a deeper fashion and the possible outcomes should this statement come to fruition.

Newsletter in the Works

The Newsletter is coming right along, we have found some greater details from our Expectations Post Earlier in the Quarter, along with our candid comments…

On a personal note, if you ever want to know how fast a Quarter can go, do an all original Newsletter every 90 days… All Great, but really seems like we just completed the last one…. Time is flying I guess!

Friday

Ahhhh, it is a VERY late summer Friday heading closer to fall… Sports is getting into full force…


Enjoy your Friday and Weekend – 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

Happy Labor Day Weekend …

We wish you a very Happy Friday and Labor Day Weekend !

Monday is a Holiday and our offices will be closed as well…

With various early exits from School today, we will be out of the office for the better safety of the streets today but tethered lightly..

As a reminder its a good idea not to do money movements on a day like today, both being a Friday and a long weekend… it’s likely there will be a skeleton crew at some point in the chain….

Have a Great Friday and a Super 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

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

Hello and Welcome to our August 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!

August 2021 Video

YouTube

Financial Planning Tip(s)

Unemployment Fraud Alert

Multiple frauds occurring in continuous weeks, led us to write this post, reminding those that the fraudsters are still at it.

Their latest game…using stolen Socials and Employment information to gain unsuspecting employers Unemployment compensation.

While likely some accidentally fall through the cracks, we have yet to experience anything other than a mild inconvenience….

But do not let your guards down and if a victim, keep your eyes peeled for other items for the near term!

Child Tax Credit Confusion

After repeated confusion, here in this post we outline the new ADVANCED child tax credit payments than sneakily commenced several months ago…

Also a warning of an overworked IRS to keep line of sight to the funds in case we need to pay them back in the form of a higher tax bill when completing our 2021 Form 1040 Personal income tax return in April of 2022!

Capital Market Comments

Kyle Bass Forecasts

In this podcast derived post, we re-visit Kyle Bass again after a few year hiatus…

Here are his latest forecasts…. hopefully they come true

  • The Federal Reserve will continue to support the markets with continued purchases.
  • Federal Reserve feels responsible for Capital Markets … i.e. Every Federal Reserve member has a Bloomberg Investment terminal on their desk and post public talks, Fed members go back to their office to check the markets reactions to their comments.
  • Much more inflation than actually as printed by CPI – (Consumer Price Index) Example of car price increases up 300% over last thirty years, but CPI auto costs increased 5% over that period.
  • Cost of Food increases may cause social inequity problems.
  • Oil hits $100 per barrel this year … due to mal investment over the last 7 years.
  • Short term interest rates not to go higher than 1.5% and long term (10 year) rates will not go higher than 2.5%. i.e. Bernanke Helicopter speech outlines the difficulty in raising rates a lot once they are at a lowered level for some time.
  • We push through the Delta Variant and there is a REAL re-opening effect that works its way through the economy (Hope this is correct!)

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

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

Child Tax Credit Confusion and Clarity … Many Receiving Payment Who Have Never Had Credit Before …

Approximately two and a half months ago, advanced Child Tax Credit funds commenced deposit on the IRS’s estimate of who is deserved (The IRS is juggling a lot of balls right now!)

We have been in contact with folks who have never received a Child Tax Credit that are receiving the advance…. with the note above of how busy the IRS is, it may be a good idea to keep line of sight to these funds until you file your taxes, just in case you need to cough the advance back up at tax time in the form of a higher amount due!

IRS Statement of Child Tax Credit and Thresh Hold Levels of Qualifications

This is the best summary we could find, although a bit deep, here from the IRS :

A1. For tax year 2021, the Child Tax Credit is increased from $2,000 per qualifying child to:

  • $3,600 for children ages 5 and under at the end of 2021; and
  • $3,000 for children ages 6 through 17 at the end of 2021.

Note: The $500 nonrefundable Credit for Other Dependents amount has not changed. For more information about the Credit for Other Dependents, see IRS Publication 972, Child Tax Credit and Credit for Other Dependents.

A2. Yes. The Child Tax Credit phases out in two different steps based on your modified adjusted gross income (AGI) in 2021.

The first phaseout can reduce the Child Tax Credit to $2,000 per child.

  • That is, the first phaseout step can reduce only the $1,600 increase for qualifying children ages 5 and under, and the $1,000 increase for qualifying children ages 6 through 17, at the end of 2021.

The second phaseout can reduce the remaining Child Tax Credit below $2,000 per child.

For additional information on the amounts of modified AGI that reduce the 2021 Child Tax Credit, see Q C4 and Q C5, below.

A3. For purposes of the Child Tax Credit and advance Child Tax Credit payments, your modified AGI is your adjusted gross income (from the 2020 IRS Form 1040, line 11, or the 2019 IRS Form 1040, line 8b), plus the following amounts that may apply to you.

  • Any amount on line 45 or line 50 of the 2020 or 2019 IRS Form 2555, Foreign Earned Income.
  • Any amount excluded from gross income because it was received from sources in Puerto Rico or American Samoa.

If you do not have any of the above, your modified AGI is the same as your AGI.

A4. The Child Tax Credit begins to be reduced to $2,000 per child if your modified AGI in 2021 exceeds:

  • $150,000 if married and filing a joint return or if filing as a qualifying widow or widower;
  • $112,500 if filing as head of household; or
  • $75,000 if you are a single filer or are married and filing a separate return.

The first phaseout reduces the Child Tax Credit by $50 for each $1,000 (or fraction thereof) by which your modified AGI exceeds the income threshold described above that is applicable to you.

A5. The Child Tax Credit won’t begin to be reduced below $2,000 per child until your modified AGI in 2021 exceeds:

  • $400,000 if married and filing a joint return; or
  • $200,000 for all other filing statuses.

The second phaseout reduces the Child Tax Credit by $50 for each $1,000 (or fraction thereof) by which your modified AGI exceeds the income threshold described above that is applicable to you.

Have a Great ” Child Tax Credit Advance Payment Deep Dive” 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