Category Archives: Investing/Financial Planning

A Little Overzealous …. Friday …

So yesterday there was a lot of red (dropping in value) on many of financial professionals and likely your electronic apparatus with regards to Capital Markets…

What’s Up?

A Little Overzealous …

As you know, we are a very “Glass Half Full” firm and individuals as a whole…

But Hang on just a second  … it makes no sense to rally all the way back to almost where we were before Covid 19 became an issue….

Do we think there will be a vaccine? Yes… Newsletter expands in great detail…

Do we think investors should look over the valley and to the greener pastures on the other side? Yes… and they are….

Do we think Capital Markets are ready to be where they where before all of this with the uncertainty of looking through the Valley? Not yet … a lot of uncertainty still…

Yesterday… Capital Market Participants agreed…

6-11-20 Indexes

A dose of reality may have sunk in as the FOMC announced they expected slower growth for the next two years and as such lower interest rates….

Or maybe, some awakened to the fact of where we were …  and where we are now… and said “Wait a Minute!”

All part of the process…. in due time this will all seem like a faded memory… not yet!

Expect ups and downs along the way!

Have a Great “Back to Reality” 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

Don’t Fight the Fed Brings New Meaning … Where the Stimulus Funds are Being Parked

During the Great Recession of 07-09, the FOMC (Federal Open Market Committee) led by then chairman Ben Bernanke, began an unprecedented (at the time), pushing of money into the financial system. Take a peek at the 2008-2009 move upwards in the graph below.

Fast forward to present, and the sequel (usually more dramatic) …. is well, MORE DRAMATIC…. take a look at the horsepower the FOMC is throwing at our current situation…. makes 08-09 look like a mini me version.

Bazooka is fitting!

 

img_1384

Interestingly, these funds are finding their way, conservatively into deposits in institutions, which can be seen by the next chart…. oddly, a non banking crisis as compared to the great recession which was definitely a financial crisis has more worried… hence the parking of money into low interest savings rates.

Will be watching to see if this continues or begins to trickle out into the economy … would be very stimulative if it does!

img_1383

Speaking of the FOMC, they have a meeting today, any major changes in their posture would likely be market moving.

Have a Great ” FOMC has a Bazooka” 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

 

 

 

 

What Happens When You Get A Decidedly Positive Economic Reading, While Expecting Negative?

Last Friday, June 5, 2020 the Bureau of Labor Statistics (BLS) released its regularly schedule monthly report of hiring and firing report nicked name “The Employment Situation”

Closely followed as a broad measure of the health of the economy and the consumer, experts (so called) from all ports of finance (Economist, bankers, investment bankers, brokers) tally their estimates of what the monthly reading will be.

In all fairness, due to bread crumbs from other reports, usually the forecasts are very close and often garner a quick glance and a carry on to other items attention span.

Fridays expectations were for a loss of just over 7 million folks.

Oops – What Happens When You Miss Big?

With an expectation of ( -7 million) more job losses and announcement of +2.5 million gains, caught Market Participants WAY off guard…

6-5-20 Nonfarmpayroll surprise

Interest Rates took note as well… which is very logical, as rates go up as economic conditions expand…

6-5-20 Us 10 year treasury

Likely ahead of ourselves a bit, but heck it is a start….

Bumps most certainly still ahead… but still a start…

Have a Great “Why We Don’t Forecast Much” 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 Acceptance of Virtual Pivot … 98% Want to Work at Least SOME Time Remotely … Friday … Heads Up Office Travels Next Week

Hope you liked the midweek, more futuristic post here about the Satellite constellation that looks to bring half of the dark side of the planet into Cell coverage…

In an “You Ain’t Seen Nothing Yet” preview, wait until you see the research coming soon on healthcare and dominating the coming Newsletter… amazing… Digressing…haha

The Pivot to Virtual has Long Term Desire

Here in this post earlier we spoke of how fast Virtual Became Reality…

Not surprisingly, many are fond of the new situation….

Check the stat… 98% interested in some type of “Work From Home” Presence …. some good reasons as well…

Tail Winds for our Homes …. Head Winds for Our Landlords of Office Space …

From our Friends at Visual Capitalist

b8780aea-4b3c-4faa-81fb-b04cae5c29e9-49855-000003ca0134d2d5

Likely a blend of sorts when this is behind us… YES it will be behind us eventually… wait till you see what is coming from our Virtual Research… soon more here and dominated in the Newsletter!

Ahhh…. today is a Friday, in what felt like a more normal (busy) week, albeit most days from home … and out of the office…..

Next week Jen heads to the mountains for some fresh air and much deserved VACA … those few that have called may know she can easily remotely answer the office phone as we are still Phase 1 in our building. Next week she enjoys the mountains uninterrupted…

I will also be out of the office and out of town at the end of next week, but will be tethered electronically !

Enjoy your weekend! Thanks for listening!

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

Connecting 4 Billion People … Half the Worlds Population Shortly – SpaceX’s Starlink

So there was a time when manufacturers laughed and Elon Musk and said no way would he ever get an electric car off the assembly line, much less in our garages….

Neat posts from the past on his Tesla journey, here, here and here … and did you notice he had a successful launch over the weekend?

Starlink by SpaceX

With a goal of launching twenty thousand, yes THOUSAND low level satellites this year for connectivity of cell service, likely is not a good bet against him…

Here is a picture of a 60 satellite launch…

 

Starlink_Mission_(47926144123)

 

You may say, so what?

His goal is to bring the other half of the world on line via high speed 5G cell at the latest 2025 … and it looks like he may complete it much earlier…

 

Global Connections in years

Sure, there will be some “bad” guys i.e. hackers that come on line…. but think of the brilliant brain power and future consumer that also come on line.

Anyone with a bit of salt in their hair recalls the dial up connection that likely was their first experience with the internet… not these folks, they will come up at 4G and most likely 5G as their first connection… thousands of times faster than our first connection… maybe even 100’s faster than what we have now…

Pretty positive stuff!

Have a Great “4 billion soon” 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

 

May 2020 Podcast Video, Financial Planning and Capital Market Update – By John Kvale

Hello and Welcome to our May 2020 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!

May – 2020 Video (YouTube)

 

Financial Planning Tip  –

Mortgage Rates

Looking at the chart of the 10 year treasury, we can see rates have finally settled and we are hearing the volume of lenders overflow has calmed as well. While the 10 year is not an exact predictor of Mortgage Rates it is loosely correlated.

Now may be a good time to check your Mortgage Rate and consider refinancing!

Here is one of our favorite and most popular posts on the items to remember when you are getting a mortgage and especially when you refinance.

5-29-20 10 year us treasury

The Virtual Pivot

In true making Lemonade from Lemons fashion, not only have we been able to access the John Mauldin event, with over forty hours of speakers, but a National CFA(Chartered Financial Analyst) event and several others were completed virtually.

We have so much awesome information to share in the coming weeks…. oddly, that we would have not had access to if they had been held live!

Looking forward to sharing…. tons if info!!

Capital Market Comments – They Came Out!

The Look Through Continues

With current earnings being less than stellar, you may ask why the markets are clawing their way back?

It does appear investors are looking through the valley and attempting to price in what a recovery may look like.

The Tuesday after Memorial Day offered multiple openings across the country…. Wall Street wiped its brow as people came out!

Expect bumps, and headline shocks, both positive and negative … but that’s why we are happily conservative investors at heart!

5-29-20 YTD SP 500 Small Cap International

Have a Great Day – Talk to you at the end of June!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
street-cents

Making Lemonade from Lemons … Virtual Conference Notes …. A Conference Passed on for Over a Decade … Meet Ian Bremmer AGAIN

Choosing not to attend a conference held by John Mauldin for over a decade, due to travel constraints, cost, and bad timing of the conference, this year his big conference of the year went virtual and the price dropped by a two thirds.

Not only because the above, but with a total of 42 speakers and counting, slides and transcripts along with a downloadable MP3 of each speakers talk, Lemonade from lemons occurred, and we signed up.

With over 40 hours of information, we plan on dedicating much if not all of our coming Newsletter to reviews of the speakers … the goal of the conference is to look into the future for “Economic Risks, Challenges and Opportunities in a Post Covid 19 World

Meet Ian Bremmer AGAINIan_Bremmer_headshot

Back in 2016 at a national conference (live, in person) we first crossed paths with Bremmer  (a stand out thinker and Political Scientist)  and wrote about his comments on the then coming election here.

Fast forward to today, and here are a few bullets from his virtual talk we found interesting.

  • Taking 10% out of the Economy now may not feel as bad as times before since we are wealthier now.
  • Maybe this is the crisis needed to really make some big items change.
  • Unilateralism, not isolation. I.e. Canada, US, Mexico will become more connected unilaterally.
  • Will we have a new global order? Nah, just an acceleration of what was happening anyway.
  • Could this be Goldilocks Economy – Yes because this Crisis could bring GEO Political institution updates –
  • GEO Politics are cyclical, just like Economies.

Look for more details, as mentioned above in the coming Newsletter…. but you get the gist… some good stuff!

Have a Great “Bremmer Future 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.
jkfinancialinc
street-cents

Zoom Value Versus Top Seven Airlines

Before just a few weeks ago, GotoMeeting, Skype, WebEx, Teams and many other tools were on our radar and actually had been used…

Had Never Heard of Zoom

From our friends at Visual Capitalist

Zoom V Top Seven Airlines

Forecast here…. this will eventually NOT be the case after things revert back to more normal !

But for now, it is what it is !

Note the staggering user growth…

img_1375

Have a Great “Zoom Boom” 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

Good News On Housing, Mortgage Rates, And A Happy Consumer … Early Observations

Last week we had two good personal data points concerning housing which set us in motion for additional research.

With residences being one of the larger assets for many, a downturn in prices i.e. 07-09 … caused pause for much of the consumer due to a drop in asset value, creating a negative feed back loop, thereby lowering confidence and spending.

Things may look different this time.

Initial Data Points On Housing/Residence

The jury is still out on all of this, and we would think commercial i.e. Office Properties, raw land, and other similar assets may see negative pressure initially coming from our current situation and the easy pivot to Virtual ….

However a silent winner, or at least a stabilization of value may be residential. It makes sense as there are usually winners and losers when change occurs.

With two noted sales last week, we set out for more information on what may be occurring.

The MBA Purchase index, (includes all purchase mortgage applications) has bounced back strongly and is back to about 90% of the original tracking high, set just a few months ago. Hat Tip RB, for bringing this to our attention, we were very surprised!

Here is a good chart, which is copyright protected, as such, not included in this post.

Mortgage Rates Lower – Included in the nice bounce back of the Purchasing Index above, are the following updated lower Mortgage rates … a second positive to go with the consumer and residence real estate.

While this lowered mortgage rates took time to develop (blip in chart), due to a dash for cash and a wave of refinance, along with underwriters concerns of consumer credit health, due to heightened unemployment, it does appear lower rates may be adding wind to the sails of residential market.

5-16-20 30 year mortgage rate

Consumer Confidence – One of the most widely followed confidence indexes, the University of Michigan Sentiment index last week released their latest results, and found surprisingly the index jumped higher than expected, mostly based on current situations, likely associated with the light at the end of the tunnel of openings.

Here is a chart from last month, again copyright restricts last weeks results, but this index bounced back to almost 74 last week…again surprisingly.

Certainly headed in the correct direction.

- U of M -

So a hot New Homes Mortgage Purchasing Index, along with lower Mortgage rates and a happier than expected consumer may lead to additional good news for the economy, spending, asset prices, and an eventual return to a more normal!

It’s early, and things could change quickly, but the initial bread crumbs look VERY positive!

Have a Great “Positive Consumer” Day!

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

 

 

Updated Capital Market Thoughts, Earnings, Fear Gauge, Interest Rates

We have been very careful in communicating thoughts on the Capital Markets as there are so many unknowns, it’s impossible being extremely accurate.

At the end of the prior quarter when the markets were more like a Bucking Bronco than future economic estimators, we put out our initial thoughts as follows… which so far have been pretty spot on…

Capital Market Participants will anticipate this and begin pricing in the not only conclusion of this economic slow down but the positive affects of the very large stimulus package that has been put into place.

The above being said, we think it appropriate to update you on our thoughts on where we are, and where we may be going …

So here we go …

Earnings

In normal times earnings determine the movement of the markets. Being in slightly different times, earnings are, and will be bad for the current and likely next quarter. The good news, this is not surprising to anyone.

Market participants are more interested on what it will look like on the other side, as things begin to get closer to a more normal environment.

There will be bumps, there always are, but being forward looking, participants will most likely look even farther ahead than normal and ignore the immediate results.

Major Equity Indexes Worldwide

World Equity Markets… after dropping (most likely overshooting to the downside) rather quickly, moved back up as anticipation of future growth began being priced in …

5-11-20 YTD SP R2k EFA

VIX – Volatility Index – aka Fear Gauge

A few years ago, on December 20, 2017, we commented on the record breaking lows the VIX had made …

Over the last 26 years the VIX has registered a end of the day reading of 10 or less 9 times.

At the close of market just a few days ago, as you can see, 9.42.

Care to guess how many days and counting the VIX closed below 10 in 2017 SO FAR?

49 … FORTY NINE … and counting!

Fast forward to today….  in the high 20’s and low 30’s as of late… down from above 80, which was record breaking in it’s own right….

A Continued lower VIX should be good for Capital Markets.

5-11-20 VIX

Interest Rates

The FOMC, Federal Reserve Open Market Committee, correctly dropped rates to zero as extra stimulus for the situation. Eventually rates got to a lower boundary, see chart below, take notice of the increase in rates before finally settling at a lower range. This represents a dash for cash when original fears commenced. We would be surprised to see rates stay here for a decade, as they were after the great recession of 07-09.

5-12-20 Treasury 10 Year Yield

So where are we going?

Last week we mentioned here in our Edison post, we think a cure will eventually be found, and we still do.

The day those four words are hopefully spoken …

We Found a Cure!

Our lives will change back to more normal, economic growth will pick up and a giant sigh of relief will come across all of our brows as well as a cheerful day/week in capital markets and many otherwise distressed assets.

If a relapse or fear of one occurs, there will be heightened volatility and slower Economic recovery ….

Our bet is on the former rather then the latter, but as mentioned at the beginning, no one really knows.

What Do We Do?

Stick to our allocations, trust the system, and have patience.

Will there be times and items we do not like? Sure, there always are, but we will get through them together!

Oh… and remember, Stay Informed not Consumed! (Over Drama catches the most eyes!)

Have a Great “Updated 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