Hello and Welcome to our January 2019 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 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!
January – 2019 Video
Financial Planning Tip (s) –
Get and Earlier than normal start on those Taxes
Here in this post, we remind everyone that due to the new tax laws, it will be a good idea to get your tax information to your professional as soon as possible.
If your using tax software, be sure to do the recommended updates as we feel certain there will be necessary updates to the tables along the way.
Corrected 1099’s are the usual, with only a few last year, we will give everyone the green light once we get our first round of corrected tax forms – but again go ahead and get started with your taxes!
Stunning Findings about your old employer 401k
We had long suspected as much, but in this post we review a Cerulli study that interviewed over 800 401k providers, only to find out that less than 30% really want your funds once you leave.
We have experienced less than stellar service over the years with former employees 401k plans – leading to our long suspicion of these findings.
Make Pension Changes/Decisions Carefully
While our favorite commencement benefit for pensions (100% jt survivor) is fairly straight forward, the simplicity ends there.
In this post, we review recent trends in buy outs and what to watch for, as well as the many scenarios we have experienced that are not always in our best interest.
Capital Market Comments –
Good News – Recovery without a Re-test – So far
What a different a month makes – WOW! We literally have gone from the sky is falling to sunshine!
In our summary post in December, we mentioned that fast moving slumps, such as the one we had, frequently do not last long….
Here, earlier in the month we also mentioned that we fully expected some type of retest of those lows before we gained our footing.
We still do expect some type of re-test, but as of this date we have had the following positives that have added to the markets better mood:
Federal Reserve (FOMC) have turned very cautious about raising rates further (We are happily surprised at their yielding, and even more surprised at market participants joy)
Tariff talks are making progress – Interestingly, China has seen a slow down in their economy making for slightly more urgent talks – with a little compromise and statesmanship a resolve looks more likely – again a positive for capital markets.
Earnings are still cranking along – For the prior 4-6 quarters, earnings were red hot and hitting on all cylinders, so hot, they were not sustainable. Companies are still reporting good earnings, just not the Red Hot, overheated earnings from prior quarters – this is good news as it avails the FOMC to not have to raise rates to slow the economy –
All in all a Win- Win!
Have a Great Day – Talk to you at the end of February!
Hello and Welcome to our December 2018 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 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!
December – 2018 Video
Financial Planning Tip (s) –
Staying Invisible on the Internet
With concerns of our personal information being constantly delivered/sold to others, we found this really neat chart, here in our post as a great guide on staying invisible on the internet.
The chart is HUGE, noting the many ways we are being tracked this day and age… lots of neat, stop tracking me techniques included…
Capital Market Comments –
Good News – Such Fast Movements May Not Last as Long
One time when being fast may be to our benefit …
Markets that throw a quick hissy fit frequently get their feet under themselves …
Using the Great Recession of 07-09 as a guide (below) – BTW we DO NOT think this is what we are experiencing… it took years for the drop to occur, not days…
We may be experiencing a slow motion 87, 91 or 99 like drop, which were faster, briefer, caused by outside worry and forces, but certainly concerning at the time!
Let’ all buckle up and be thankful we NEVER drive fast – time will tell!
Have a Great Day – Talk to you at the end of January!
Today at 2:30 Eastern time, Jerome Powell, the head of the Federal Open Market Committee (FOMC) will make the decision to hold to his earlier promise of raising rates a tiny .25% and more importantly signal possible future rate increases…
The New Normal
By looking at this multi-decade chart below, it is easy to see that rates are no where near their highs…
After being low so long, the new normal may be lower – market participants seem to think/want so …
From our perch, the best outcome today would be a raise once and “check the data” statement …
We will know in a few hours- do not forget, there are skeleton crews on much of Wall Street – making for a possible sloppy response….
Hello and Welcome to our November 2018 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 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!
November – 2018 Video
Financial Planning Tip (s) –
Clump – Maximizing the new standard deduction
With a $12k individual standard deduction and double that for joint filers it takes work to maximize the standard deduction threshold… Add the fact that SALT State and Local Tax deductions are now limited to $10k annually, clumping expenses into one year as mentioned here in our post and visually below may be the only way to get above the standard deductions for many …
Capital Market Comments –
Powell Signals a Slower Rate Increase
Current FOMC (Federal Open Market Committee) chairman Jerome Powell signaled the rate increases may be closer to over than just was stated just a month earlier… where a December increase, which is still almost certain, but three additional increases were promised in 2019 – not any more.
Given the long/lower rates of the last decade, it is not a surprise that the new normal may be lower –
Market Participants cheered this statement!
Have a Great Day – Talk to you at the end of December!
Welcome to our special year-end monthly Economic, Capital Market, and Financial Planning tip of the month.
Even though 2015 is gone, there are ways to reach back and help your tax situation.
For those new to our writings, we touch on the most pertinent Financial “stuff” along with a video of my mug that has even more specialized details of the latest month as well as this post.
These are just a few simple examples of HSA benefits — check with your health provider of you are uncertain of availability.
sEP – simplified Employee pension
Offset non w-2 income – think consulting or temporary
Pre-tax savings, up to 25% of adjusted income
Deadline is final tax filing date, INCLUDING extensions for the prior year – reaching back into last years tax liability
These are just a few of the benefits of a SEP !
Give us a call if you have any confusion/questions! Do not try any of these techniques without first visiting with you professional advisor!
Rates raised
December marked the first time in almost a decade that Federal Funds Rates were raised.
While looking dramatic at first:
A longer term view tells the story.
Markets have been jittery of late, and we think this is more of a time duration of our economic expansion, than anything else. Higher rates will eventually help, in our opinion! Some great proof coming soon, when more room is available !
Frequently a reporter is picked to “leak” information as needed to quietly deliver information to the public. Janet Yellen and the other FOMC members have anointed Jon Hilsenrath, a reporter for the Wall Street Journal.
When Jon writes, people listen!
Hilsenrath Report Fed on Track to Raise Rates
As mentioned here and here, we believe Yellen and crew at the FOMC want to raise rates as soon as possible. Hilsenrath, the chosen “leaked” reporter confirmed the FOMC is on track to raise rates this year most likely mid-year.
A major shock of some type could alter this. Our belief, lower rates may actually be holding the economy back through too much artificial means.
Recall our Newsletter study finding fed fund average rates of 5.1% since data recorded. First goal, get to 1% …. then what if we only get to half of our average, or 2% … Wow! This time it’s different, maybe, but doubtful.
What if raising the short-term rates actually spurred our economy, not inhibited it?
Barring a meltdown of some type, the recent Gross Domestic Product (GDP) final revision for the most recent quarter of 5% gives Janet Yellen and Federal Open Market Committee (FOMC) gang a green light.
Mentioned earlier here in our post and a prominent portion of our coming Newsletter, we think higher short-term rates are in the cards. With a long-term average of 5.10% (backed by research in our coming Newsletter) rates may begin to get back to normal … Finally!
From the Bureau of Economic Analysis Release (BEA):
We acknowledge the argument this is backward looking and with tumbling (more like falling lead balloon) energy prices, future GDP prints will be weaker initially. We think higher rates MAY have moved to an earlier point on the calendar for the deciding FOMC gang. Much welcomed by us !
Lucky timing for an expanded article on this the next Newsletter.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, please consult your financial advisor prior to investing!
Background
The is the vocal portion of J.K. Financial, Inc. a Dallas Texas Based Fee Only Total Wealth Financial Planning Firm. Founded by John Kvale, a Dallas Texas Fee only Financial Planner and Total Wealth Manager.
January 2019 Podcast Video, Financial Planning and Capital Market Update – By John Kvale
Hello and Welcome to our January 2019 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 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!
January – 2019 Video
Financial Planning Tip (s) –
Get and Earlier than normal start on those Taxes
Here in this post, we remind everyone that due to the new tax laws, it will be a good idea to get your tax information to your professional as soon as possible.
If your using tax software, be sure to do the recommended updates as we feel certain there will be necessary updates to the tables along the way.
Corrected 1099’s are the usual, with only a few last year, we will give everyone the green light once we get our first round of corrected tax forms – but again go ahead and get started with your taxes!
Stunning Findings about your old employer 401k
We had long suspected as much, but in this post we review a Cerulli study that interviewed over 800 401k providers, only to find out that less than 30% really want your funds once you leave.
We have experienced less than stellar service over the years with former employees 401k plans – leading to our long suspicion of these findings.
Make Pension Changes/Decisions Carefully
While our favorite commencement benefit for pensions (100% jt survivor) is fairly straight forward, the simplicity ends there.
In this post, we review recent trends in buy outs and what to watch for, as well as the many scenarios we have experienced that are not always in our best interest.
Capital Market Comments –
Good News – Recovery without a Re-test – So far
What a different a month makes – WOW! We literally have gone from the sky is falling to sunshine!
In our summary post in December, we mentioned that fast moving slumps, such as the one we had, frequently do not last long….
Here, earlier in the month we also mentioned that we fully expected some type of retest of those lows before we gained our footing.
We still do expect some type of re-test, but as of this date we have had the following positives that have added to the markets better mood:
All in all a Win- Win!
Have a Great Day – Talk to you at the end of February!
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
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Posted in Economy, FOMC, General Financial Planning, Interest Rates, Investing/Financial Planning, Market Comments, Monthly Review, Podcast, Retirement Planning, Tax Related, Video
Tagged 401k, Fed Funds Rate, FOMC, Jerome Powell, Pension, Pension Buy out, Pension Lump Sum, Tariff