It’s hard to believe the final quarter of the year included an Election, multiple vaccines, the commencement of vaccine shots and near the end of the quarter, a second stimulus package for the year 2020. Wow!
Three Major Acts in a Little Over Twelve Months
If we look back just a little over twelve months, three major bills, The Secure Act, passed in late 2019, but left in the shadows by lasty years events. Then the Cares Act late first quarter 2020, followed by the Appropriations Act of 2021, which was an extension of the Cares Act. If you are not confused yet (or do not even remember some of these), congratulate yourself, most are! Not to worry, we will be reviewing all of these over the year as the much forgotten, Secure Act will have multiple planning techniques and mandates that once again may have been forgotten.
Who let the dogs out? Or Maybe Better Said, The Dogs Continued to Cheer!
Capital markets bullied by federal reserve purchases and anticipations of good news coming from a vaccine, in true Capital Market form did cheer much of the news, but not as much as many had thought, mostly because it had already been anticipated.
As we had mentioned multiple times, Capital Markets are likely well ahead of themselves currently which may make for tougher rowing in the near term, but just as clothes purchased a little too large for that growing teenager, Capital Markets with an expected economic recovery, should be able to grow into their overzealous clothes. However, with current stretched valuations, negative surprises may be met with more volatility due to the priced-to-perfection levels currently, once again making us happy we are conservative and diversified investors.
Interest Rate Watch
One thing we will be watching closely are interest rates, and their levels, as the economy begins to come back on line. The Federal Reserve is squarely focused on keeping interest rates down through their purchases. Should interest rates begin to rise or should the FED ease off (or even give speak of ease) of the pedal and interest rates rise on their own, especially quickly, this could be a headwind to Capital Markets and other assets. Not to worry, we will be watching and letting you know what we see and taking appropriate actions as needed.
In Closing
Your Fourth Quarter 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 and Client Relationship Summary (Form CRS); Requests for review will be accepted via phone, mail or email, and mailed immediately upon request.
Sincerely,
John A. Kvale CFA, CFP
J.K. Financial, Inc.
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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January 2021 Financial Planning and Capital Market Review – By John Kvale
Hello and Welcome to our January 2021 (First Monthly Review of the New Year) 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!
January 2021 Video – First of Year
YouTube
Financial Planning Tips
Required Minimum Distributions Now 72
As mentioned here in our post, do not feel bad if you lost track of changes, as in just over 12 months there were THREE – yes three major laws implemented.
Late December of 2019, the SECURE act (Setting Every Community Up for Retirement) among other things, upped the first mandatory RMD (Required Minimum Distributions) from Qualified/IRA/401k type plans to 72!
The Covid 19 related Cares Act passed in late March of 2020 nullified RMD’s for all of 2020, making for some confusion.
Second Stimulus Check Update
In this post, we review the new Stimulus check amounts, and where you can CAREFULLY go to check the status of your check…. here are the highlights…
Generally, U.S. citizens and resident aliens who are not eligible to be claimed as a dependent on someone else’s income tax return are eligible for this second payment. Eligible individuals will automatically receive an Economic Impact Payment of up to $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child. Generally, if you have adjusted gross income for 2019 up to $75,000 for individuals and up to $150,000 for married couples filing joint returns and surviving spouses, you will receive the full amount of the second payment.
Here is the link to the US Government tracking site:
https://www.irs.gov/coronavirus/get-my-payment
Once open need to Click on “Get My Payment” Tab
Be very careful when opening this site to NOT allow your browser to jump to any other site than that associated with the IRS as you will be asked for confidential information!
Capital Market Comments
Buffett Back Of Napkin Valuation Metric
After happily receiving an “OK” to reprint graphs directly from the CEO of this industry publication – Look Out, there are tons of Great Articles that we look forward to bringing you!
Up first, a great broad Buffett “Back of the Napkin” Market Value Metric- This is the Market Capitalization of the S&P 500 divided by the US Gross Domestic Production…. This measure has never been this high before- sending a warning signal for Current Valuations.
“Price is what you pay, value is what you get!”
Happy Start to the New Year!
Have a Great Day and Super Start to the New Year!
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
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Posted in Care Act, Economy, General Financial Planning, Investing/Financial Planning, Market Comments, Monthly Review, Podcast, Retirement Planning
Tagged Buffett, Buffett Valuation, Cares Act, GDP to SP 500, Review, RMD, Secure Act, Stimulus Check, Stimulus Check Link