Tag Archives: Cover Letter

First Quarter 2018 Cover Letter Review

Posted on April 9, 2018 by | Leave a comment

In true Groundhog like fashion, Capital Markets, after getting way ahead of themselves early in the quarter, saw their shadow only to turn, run and hide.

Included in the newsletter, which we sent early to give everyone a chance to view and remind of the tax strategies, is an article about the VIX and its reverse brother the XIV. These funny products along with the more recently noted tariff talk has been the recent excuse for capital markets to act like a bashful Groundhog.

The reality is capital markets got way ahead of themselves and needed time to rest. From our perch we would much rather them rest go sideways or even down a little bit, rather than getting WAY ahead of themselves like they did early in the quarter, only to quickly revert and likely overshoot to the downside.

Interest Rate Increase

In this most recent quarter we did just digest another small interest rate increase. Our new Federal Reserve Chairman Powell, looks to continue the gradual increase rates, slowly normalizing short term interest rates, and continuing on the path left by his predecessor Janet Yellen.

Capital Markets have a very unique way of signaling Interest rates have been raised too far called an inverted yield curve. Look for rhetoric about an inverted yield curve soon, as the historic importance and accuracy of this effect are in our crosshairs at this time.

Consumer and Earnings

With an economy that is two thirds driven by the consumer, a happy and spending consumer along with company earnings, which are beginning to digest the new tax reform, lead to a good backdrop.

As we mentioned in our Newsletters and repeatedly at street-cents, this is likely a year we will need patience, we see no change in that view at this time.

Have a great spring, talk to you in the summer!

Sincerely,

John A. Kvale CFA, CFP

Leave a comment

Posted in Interest Rates, Investing/Financial Planning, Market Comments, Performance Report Cover Letter, Political, Tax Related

Tagged , , , , , , ,

Fourth Quarter 2017 Cover Letter Review – Private Policy

Posted on January 8, 2018 by | Leave a comment

Do you recall the last time you went to a movie, maybe even begrudgingly, because expectations were low, but the movie turned out good, making for a wonderful surprise? Starting out the new year of 2017, most, including us had minimal expectations for the year 2017; A bad movie.

What If We Already had a Bear Market?

In our “What if we already had a Bear Market?” article in the coming Q1 2018 Newsletter the early 2016 drops across most asset classes except the more popular ones were 20% to over 30%. While markets don’t usually repeat, they often rhyme, again setting low expectations for the 2017 movie.

Sleepy VIX

Not only did we not start out bad, (Good Movie) but we may have just experienced a generational “Fear-Less” year. In our record breaking low “VIX Fear” article again in our coming Newsletter, a reading less than 10 on the VIX (Volatility/Fear Index) had occurred just 9 times over the last 26 years. Our surprisingly good movie year recorded 53 end of day VIX closings below 10, five times as many as ever recorded. Good movie.

Interest Rates

Post great recession of 2007-2009 most expected the FOMC (Federal Open Market Committee) controlled rates ascent to begin moving back up as they always did through history. Thanks to a stubborn, data watching, Janet Yellen (FOMC Chair) rates have been correctly moved up gradually. The current Federal Funds rate was increased 3 times in 2017, once in December to the targeted level of 1.25-1.5%. Officials are on record for another 3 moves or .75% in the next year, gradually pushing rates nearer their more normal historical levels.

Janet Yellen will be leaving her post next year and we look for her replacement to continue on the transparent, methodical, data watching, path of rate increases that keep market participants personal VIX/Fears in check.

Next Year’s Movie?

Looking into next year’s movie, we think it is healthy to have a conservative view again. We are not predicting or welcoming a bad movie, but just staying vigilant! Good movie or bad, we will be prepared.

In Closing

Your Fourth Quarter 2017 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; Requests for review will be accepted via phone, mail or email, and mailed immediately upon request.

John A. Kvale CFA, CFP

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.

Leave a comment

Posted in Investing/Financial Planning, Market Comments, Performance Report Cover Letter

Tagged , ,

Third Quarter 2017 Cover Letter Review

Posted on October 9, 2017 by | Leave a comment

There are times when capital markets are sensitive to a whiff of any disturbances, with the least seeming un-important event causing dramatic sentiment and then of course capital movement.  

We are not in those times currently! 

Over the latest quarter, we have seen Mother Nature flex her muscles in some of the most terrible disastrous Hurricanes in a century. Participants and markets mostly relieved after the conclusion of multiple landings, took the damage in stride and continued to move forward.  

On a regular occurrence, over the last 90 days, international countries have fired powerful test fired weapons, garnering much headline banter from neighboring countries, United Nation members and multiple leaders of countries. Participants and markets yawned and moved forward again. 

An old foe of times past, debt ceiling concerns and debate, even arose during the latest quarter. Upon an extension capital markets had a relief moment but nothing near the size of just a few years ago, when even a whiff of debt ceiling talk sent participants running for cover and capital markets into a tailspin.  

Our friends at the FOMC (Federal Open Market Committee) have set a plan to lower the balance sheet, over an extended period of time, slowly and diligently. Market participants and capital markets once again looked past the news and forward with very little disruption. 

Today, capital market are acting like the Eveready Bunny; they just keep going, which is fine by us, but there will be a day when that changes as this has been one of the longest runs in market history with not even a 5% correction.  

Happy Participants and Capital Markets have created a problem finding valuations that look inexpensive to reasonable as their ascent has pulled most domestic assets to high levels. Good news comes from our friend across the pond. It appears our international friends are getting their acts together in a big way and with a less rising Unites States dollar, the stars may be finally aligned for tailwinds from abroad. 

Our core article in the coming Newsletter discusses from a high level several valuation metrics, world capitalizations and even the US currency, its long-term average and recent movement. 

Historically we are entering a favorable time for market participants and capital markets as they frequently embrace in a positive way, the Holiday seasons. We will see if they do the same this year, and if not, we will be ready. 

Have a good fall season and we hope to see you at our Holiday Party at the Dallas Arboretum the Saturday before Thanksgiving weekend.

John A. Kvale CFA, CFP

 

 

 

Leave a comment

Posted in Investing/Financial Planning, Market Comments, Performance Report Cover Letter

Tagged ,

Q 4 2016 Report, Private Policy Statement 

Posted on January 7, 2017 by | Leave a comment

They did it again; Pollsters zero, people two!

In the last quarter of the year, the pollsters completely missed the mark on the US Presidential election, just as our relatives across the pond did earlier in the year on the British vote to leave the Euro, also known as Brexit.

Very similar to the Brexit reaction, as the surprise became a reality, capital markets swooned with the old faithful Dow Jones average dropping over 800 points in the thinly traded futures markets around the world near the middle of the night USA time.

With even faster speed than the Brexit reaction, market participants came to their senses and began making fascinating bets, moves, and adjustments to take into consideration what the surprise nomination may mean in the future. As mentioned in our Q1 2017 Newsletter, interest rates began moving up in dramatic fashion, this time without concern by capital market participants.

Did we mention the FOMC raised rates?

In December of 2015 the Federal Open Market Committee (FOMC) raised rates .25%, leading many to find cause and effect for the terrible beginning to 2016. See our 2016 review again in our Q1 2017 Newsletter with a terrific chart of the start of the year, along with descriptive highlights of the year.

In the most recent quarter, specifically December of 2016, Janet Yellen and crew at the FOMC once again raised rates from .25 to .50% on the very short time frame feds funds rate. They also spoke of multiple rate increases to come in 2017. This time, unlike the beginning of 2016, market participants yawned at the move, with the afore mentioned market participants not only expecting the rate increase, but welcoming future increases. The FOMC has moved from the lead story to almost unfindable as market participants seem to be less concerned with deflation and looking ahead to a possible bout of healthy but subdued inflation.

Taxes

While there are MANY items on the table for tax reform, we prefer waiting until laws are passed before making too many actual planning adjustments. There are major reforms being spoken of from Estate to Personal Income taxes that may have planning implications if enacted. Rest assured we are on top of these and will monitor and happily adjust as clarity occurs.

In Closing

Your Fourth Quarter 2016 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; Requests for review will be accepted via phone, mail or email, and mailed immediately upon request.

Have a Fantastic start to 2017!

Sincerely,

John A. Kvale CFA, CFP

Enclosure (Q4 2016 Report)
Private Policy Statement

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.

 

Leave a comment

Posted in Investing/Financial Planning, Performance Report Cover Letter

Tagged ,

Q 3 2016 Quarterly Report Cover Letter (Clients)

Posted on October 10, 2016 by | Leave a comment

Dear Investor,

An old Wall-Street saying goes something like this:

“Stocks frequently Climb a Wall of Worry!”

History shows the time to worry most is when NO ONE else is worrying. Said another way, when everyone is confident that everything is great, there is no one left to buy, and the unimaginable drop (at least at the moment) occurs without warning.

With a US election that has caused even the most calm a higher than normal heart beat and blood pressure, no matter the political persuasion, a worry is born.

A Brexit, or the exit of the British from the European Union which was a complete surprise to any who were following the almost certain stay polls, were surprised, another worry.

The historically worst start to the year (earlier this year) in terms of world capital market negative movement and calls for a world slowdown, another worry.

Prolonged lower than normal interest rates, many (present party included) think higher rates will be good longer term, after the initial adjustment in capital markets occur, but too low for too long, another worry.

Those wanting a stronger US Dollar, got what they wanted, but created another worry from a competitive standpoint.

All in all, plenty to worry about!

Funny thing is, capital markets have a way of happily ignoring the concerns and looking forward to what may occur over the next hill. It is true, markets can, and do, worry about items that should not be of a concern at times; a point for another market mood time.

Given the consumer has suddenly gained greater confidence than had in nine years, judging by the most recent consumer confidence related reports, Europe is not falling apart after the Brexit, and some type of possible stabilization from our Asian friends, capital markets are smartly treading water and patiently waiting further signals.

Enclosed is your 2016 Q3 Quarterly summary which reviews the most recent 90 days. Looking forward, October “Historically” can be a dicey month, BUT the final QUARTER tends to be the best of the year.

The most recent Newsletter is stuffed with information concerning the awesome “New Personal Total Vault” and the fantastic uses and features. If you are receiving this report via paper, you may like to know that this complete report, along with prior reports is also available in “Your Own Personal Total Vault”. If you are on the fence about changing to electronic reporting, with Newsletter in hand, now is the time to give it a try. If you do not like it, a paper delivery can resume at your request.

Have a Super Fall as we head towards the fun Holiday Season!

John A. Kvale CFA, CFP

Leave a comment

Posted in Economy, General Financial Planning, Interest Rates, Investing/Financial Planning, Market Comments, Performance Report Cover Letter, Political, Vault, World Political

Tagged ,

Q 1 2016 Quarter Performance Report Cover Letter (Clients)

Posted on April 11, 2016 by | Leave a comment

Dear Investor:

After stumbling out of the starting gate, and breaking many “Never Before Seen Negative Starts!” to the year, capital markets smartly rebounded near the mid-point of the quarter, once again throwing cold water on obscure statistics that tend to make their way to the top of the headlines when such events occur.

As noted in greater detail in our Q 2 Newsletter, we wonder if this “Record Breaking” start was a dress rehearsal or the real thing. If it was a dress rehearsal, we would expect further choppiness, which is nerve racking at the time, but presents the best/last possible buying opportunity of this decade (hard to believe, but very possibly true.) If it was the real thing we would look for capital markets to climb back to new highs, a feat not seen since mid-2015.

Near the end of the quarter, Janet Yellen, Federal Reserve chair put extra wind in the equity market sails by all but saying there will only be two rate hikes this year, rather than four, which she had said at her first ever rate hike as president chair, in December of 2015.

Curious to IF, or how many times a Federal Reserve chair has raised rates during a presidential election year, we dug deep into the past 60 years of elections, only to find a very surprising answer. We will have full details to come on Street-cents.com and our mid-year Newsletter as we wanted to be closer to the actual election.

OUR BIGGEST CONCERN continues to be the aging business cycle. Thank goodness business cycles do not die of old age (or this one would already be dead) but the longer they go, the greater the possibility they do end.

THE GOOD NEWS is that just as business cycles do end, they start again. If we rhyme with history in any way, the slowdown lasts about 18 months and the expansion 5-7 years, odds we really like. As mentioned earlier, capital markets have not seen new highs in almost a year, making a possible slowdown already well under way.

THE BEST NEWS is we are allocated well to take advantage of opportunities as they present themselves, both domestically, internationally (which has been a laggard for some time, but may be changing) and from big and small capitalization companies.

Have a Great Spring!

Sincerely,

 

John A. Kvale CFA, CFP

Enclosure (Q1 2016 Performance Report)

Leave a comment

Posted in Clients/Clients Only, Performance Report Cover Letter

Tagged ,

Q 3 2015 Quarter Performance Report Cover Letter (Clients)

Posted on October 12, 2015 by | 1 comment

Dear Investor:

In “Lucy like” pulling of the football to Charlie Brown, Janet Yellen, head of the Federal Open Market Committee (FOMC) choose not to raise rates by an even tiny .25% at their most recent meeting in September. In defense of not raising, Yellen painted a gloomy picture of the domestic and global economies. Global markets, in a seasonally weak period, acted gloomy, dropping double digits as a whole for the quarter. We do think rates will eventually be raised, but possibly not until next year.

Frothy markets only need an excuse, not a reason. While we are not sure if the reaction was a cause and effect, or just the excuse, weak capital market results were the same. Additionally, domestic corporate earnings on average are flat to negative, driven heavily by the Energy sectors sharp losses. We discuss this in greater detail in our current Newsletter.

Speaking of excuses, fears of China’s economic slowing have gained traction in headlines recently, especially affecting commodity dependent emerging markets who have received the double punch of lower commodity prices and a slightly slower exporting partner in China. With so many levers to pull and such a huge population, it may be only a matter of time before these Asian fears subside and turn from negative to positive, putting the wind at the back of an underperforming asset class and especially emerging markets – one of our favorites.

The Good news for us as investors is cheaper prices make for better long-term gains in the future. There may be headwinds, but capital markets according legendary investor Warren Buffet “Generally go up, three out of four years.”   This compounded with historically a positive time of the year, may lead to a better end of the year.

Enclosed is your Q 3, 2015 performance report which outlines the last ninety days, a very small period of time in our long-term journal to financial success.

Have a Great start to Fall !

Sincerely,

 

John A. Kvale CFA, CFP

Enclosure (Q3 2015 Performance Report)

1 Comment

Posted in Clients/Clients Only, Performance Report Cover Letter

Tagged , , , ,