Have you ever had some type of team that you follow, could be sports related or the other, that has a pretty good record, seems to be doing well on the surface, but when you look a little closer it becomes apparent that this team is dominated by the performance of just a very few individuals?
Participation or lack there of
There are a lot of similarities in the above analysis to the current capital market environment. Just like the vulnerability of your favorite team, should some of those dominant forces not perform well or heaven’s, even worse, get injured, the real truth will begin to reveal itself.
Capital markets that are thinly led can have distinct vulnerabilities. On a positive side many of the players can catch up to give greater participation. An optimistic outcome. On the negative side just like our team, should some of those more important subjects falter, reality may sink in.
Interest Rates
As mentioned in our Q4 Newsletter, higher interest rates are the tone of the times currently. Our lead article talks about the tremendous positives that higher interest rates have on pensions in the form of higher fixed income earnings. In the very short term, it is a headwind for fixed instruments, but over the long term safer, steadier, and more normalized expected returns.
Political Season Already
While it only seems like yesterday when we had a presidential election, it is hard to believe that next year, approximately this time of the year, we will have another. Recall, there will be many headlines associated with the political process, many of them possibly frightening. You know that we are careful to comment on headlines and things that have not become law, but nevertheless the frightening headlines may appear. Just remember there is a difference between a desire, speaking, debating, and a law.
Positive Seasonality Headwinds
Looking forward to the final quarter of the year, just as it gets cooler in most parts north of the equator, capital markets tend to have positive historical reference. While we are always careful to say this time is different, the Federal Reserve, if resolute in their desire, have both feet firmly pressed on the economic brakes, and as of yet have not been successful in achieving their goals.
Sincerely,
John A. Kvale CFA, CFP
Enclosure (2023 Report)
Like this:
Like Loading...
October AND November 2023 Audio Video Review, Taxes Deductions and Contributions for 2024, Your Favorite Team Analysis – By John Kvale CFA, CFP
Hello and Welcome to our October and November Financial Planning and Capital Market Update! October was slowed by the eventual update of our site, here…which continues to be in update mode!
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!
Break In: Happy to Announce a Second Client Appreciation Get Together…
We are happy to announce a fun appreciation Evening in Houston Texas!
Wednesday December 6, 2023 from 6-8 PM
Cadillac Bar – 1802 Shephard Dr. Houston Texas
Back to our regularly scheduled program:
October & November 2023 Video
YouTube
Financial Planning Tip(s)
Take the Stress Out
In this funny but serious post, just completed earlier this week, we discuss the ease of stress that allowing plenty of time and being prepared allow….
Somewhat self serving, as your stress is of course our stress….but we can all be less stressed together!
IRS Updates:
The small but coming Inflation adjustments for 2024 were announce and we completed a post here with great details….
Here are the biggies:
Then again earlier in the month we grabbed the new IRS contribution inflation adjusted levels here in this post
Again the biggies:
Capital Market Comments
Capital Weight Versus Equal Weight! – Why the Heck it matters?
In this timely October post we discuss the importance of the strength of the team versus just a few players…aka Capital versus Equal Weight ….We also get to show off some of our very cool new research “Stuff” from Koyfin….
Oh….the reason this matters so much ….is just as your team can do well with an all star or two… lose them and you could be in trouble…. the wish is players develop around them to give more depth!
Have a Great Day, Talk to You at the End of December and the Year!
John A. Kvale CFA, CFP
Share this:
Like this:
Leave a comment
Posted in Audio, Education, General Financial Planning, Investing/Financial Planning, Market Comments, Monthly Review, Podcast, Video
Tagged Holiday Party, John Kvale, Monthly Review