Hello and Welcome to our September 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!
BREAK IN :
November 14th from 6:30 to 9 PM – Perot Museum – For the Evening
We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!
September – 2019 Video
Financial Planning Tip (s) –
RMD Season is here – Is your DOB between 7-1-48 to 6-30-49 ?
In this post, we reminded all of those with the unique option of deferring that first RMD an extra year on the perils of the double income from that deferral decision…..
Defer at your own risk and make sure you will not jump a tax bracket by doing so!
Mortgage Rate Update – Time to Refinance?
Mortgage rates (the drop there of – in rates) caught our attention and in this post, we reminded of eleven (just counted them – was surprised so many) items to think of when/if you should refinance – its a big decision and there are many variables, if you didn’t catch the post and have been in your loan for a few years, be sure to take a look … another reminder will also make its way to you in the Q 4 2019 Newsletter –
Capital Market Comments –
Inverted Yield Curve Update
In this post, early in the month we reviewed the definitely inverted yield curve…. and spoke to this being one of the slowest recoveries on record…. just after our post, the yield curve did normalize on positive trade talks…. Look for more details in the coming Q 4 2019 Newsletter-
FED Lowers Again, but only by .25%
Jerome Powell Chief of the FOMC (Federal Open Market Committee) lowered rates by .25% to the 1.75 to 2.00% range, which will directly effect our overnight money, such as checking accounts and money markets…
Their fear is the prior mentioned Tariff saber rattling causing an extended slowdown….
We prefer they save that gunpowder for a real fire, but just pouring a small bit of gasoline on the coals is ok for now!
Have a Great Day – Talk to you at the end of October!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Get Ready for the R-Word Headlines … The What Word?
Inverted Yield curves have an odd and accurate way of predicting the R Word (What’s that, we rarely say this word out of optimism…… RECESSION!)
This post was actually started early last week, BEFORE a ton of headlines…. a quick google search of “Inverted Yield Curve” yielded the following….
Ok, so the word it out… but let’s go ahead and discuss….
Yields are a reflection of risk, so the longer the time, the greater the risk, the higher the yield “Should” be…
The Yield Curve is most notably the curve from normal times, lower left to upper right and is basically the yields (% interest rate) of the different time terms, such as 1,2,3,4 …10 year treasury…
There are all types of ways to measure, but one of the most accurate is the 2 years treasury against the 10 year treasury yield…
So by taking the 10 year yield and subtracting the 2 year yield, under normal times there will be a positive difference…. When the difference is negative, there is a problem as longer term risk/interest rates are lower than shorter, creating the inverted yield curve…..
2 year and 10 year Current Spread Update
1976 to present, grayed areas are R- Words
And a more blown up last year to date (had to update this chart too, as last week it had NOT inverted)
Not a deep inversion, but it has inverted…
Couple of important thoughts:
The R word is defined by two negative GDP prints in a row (no matter the depth i.e. could be -.01 and -.01)
While accurate in predicting (2-10 spread) timing is not, times vary from inversion after the R-Word has already started to multiple years…
Just as timing is a mystery, as mentioned above, depth of the R-Word from this mighty predictor is also variable…
We are watching, and you will certainly be seeing headlines!
Now you know!
Have a Great “R-Word Heads Up’ Day!
John A. Kvale CFA, CFP
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Posted in Economy, FOMC, Interest Rates, Investing/Financial Planning, Market Comments
Tagged FOMC, Interest Rates, Inverted Yield Curve, Yield Curve