Tag Archives: Rates

Q 3 2018 Newsletter Video Audio Podcast Review By John Kvale

Welcome to our Video and Audio Podcast Review of our Q 3 2018 Newsletter. For those on the road or just unable to grab the time to read, our podcast type review gives you the behind the scenes insight to our thoughts, observations and deep views of the entire Newsletter.

Click here for direct link to an electronic version (an early peek-good ole fashion paper versions are on their way to you shortly) and here for our Newsletter page

Let’s get going!

Q 3 2018 Newsletter

And here is your review!

Inverted Yield Curve

In this hugely in depth article was originally ran in abbreviated form, here, here, here, here and here on street-cents.com-

Here is the key graph-

2s 10s Spread W Recession sfredgraph

The inverted yield curve has been a good predictor of recessions.

Three Key Tax Items

In our detailed article in the Newsletter, we address the three key tax change items-

  1. Higher Standard Deduction
  2. Lower Tax Rates
  3. Less Deductions

 

Where have all the Stocks Gone?

In this Article we discuss the absence of stocks over the past several decades, leading to possible higher valuations.

2017 Declining Stocks US and World Comparison

Enjoy your summer-

See Ya next Quarter!

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
www.street-cents.com

January 2018 Podcast Video, Financial Planning and Capital Market Update- By John Kvale

Hello and Welcome to our January 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.

January 2018 Video

Financial Planning Tip (s) –

Fraud Reminderthief

Two and 1/2 issues in one week… No one was harmed, but it was a great reminder, they are out there!

As we mentioned in our post just prior to this one, the Grand Enchilada of Tax Forms enters the mail and electronic systems this week. These most popular forms are due by the end of January and fraudsters are taking notice.

Keep your eyes and ears out for anything suspicious!

Vault Saves Day Twice

Here in our real life experience post, we ended up needing the Vault to help save time and a HUGE hassle at a far distant Tennis Tournament. Who would have thought they would be so strict in identification at a Tennis Tournament?

Here is a neat reminder of what might do into your very own Personal Vault:

Legal Documents □ Wills □ Deeds □ Revocable & Irrevocable Trusts □Power of Attorney □ Codicils (Supplements made to a Will) □Living Wills/Health Directives □Prenuptial Agreements □ Buy/Sell Agreements □ Contracts Social Security and/or Veteran’s Administration Info Insurance Policies (Life, LTD, Disability, Medical, Car, Property) Medical Records Bank & Investment Statements □Pensions, IRAs, passport-2642170__340Annuities etc. □Investment Accounts □Stock Options/Certificates Liabilities □List of Credit Cards with contact information □ Mortgages □Loans Taxes □Tax Returns □ W-2 Forms Identification □ Birth Certificates □ Drivers Licenses □Passports Family □ Adoption Papers □ Marriage License □Pictures □ Audio Files □ Video Clips Property □Titles to Homes, Autos, Boats, etc. □ Warranties Employment Benefits

Capital Market Comments

Interest Rates

10 Year Treasury touches 2.70% – Where to next?

After floundering in the low 2% range, it appears interest rates may be on the rise. This is just in time as the FOMC (Federal Open Market Committee) are set to raise short term rates several times this year and the one thing we DO NOT WANT is an inverted yield curve (more on this another time).

We have argued higher rates are helpful as long as they move gradually.

So far so good!

1-29-18 10 Year Treasury

Have a Great Day!

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
www.street-cents.com

Taking a Peek at Interest Rates – 10 Year Treasury – Short and Long Term Look

Low rates are great. However we have argued multiple times, low rates too long can cause more damage than good.

Higher rates … increasing moderately, NOT super fast is the perfect scenario.

10 Year Rate Peek

Over the short term, the much watched 10 Year Treasury Rate looks like it is on a tear… maybe even moving too fast …

1-22-18 10 year - 1 year graph

While we peek at the short term, turning points are more important over the LONG term ..

Here is a longer term chart …

1-23-18 10 Year Long term

The white line on this chart is what is called a trend line. Many call this stuff VooDoo … Let’s liken this to momentum in a sporting event… hard to define, but certainly existent.

Keep an eye on the far right corner of this chart … if it continues, then we may be headed for a sustainable period of longer term rates … Good if it occurs slowly.

Have a Great “Higher Rates” Day!

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
www.street-cents.com

December 2017 Podcast Video, Financial Planning and Capital Market Update- By John Kvale

Here is our December 2017 Monthly review. If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast format.

So Long 2017 … Hello 2018 .. Nice to see you!

December 2017 Video

Financial Planning Tip (s) –

You have been IRMMAAtized – Options for Relief

In our post, here and here we discuss the Medicare Means testing levels, both historic and what we are faced with in 2018.

Due to the faster lower Tiers of income, the Social Security Administration has casted a wider net for all of us.

Here are the new levels, again from our post AND in even GREATER details in our Q1 2018 Newsletter.

2017 V 2018 Medicare IRMAA levels

A life event change may create relief – Life events not limited to the following-

  • Marriage
  • Divorce/Annulment
  • Death of Your Spouse
  • Work Stoppage
  • Work Reduction
  • Loss of Income-Producing Property
  • Loss of Pension Income
  • Employer Settlement Payment

Please see our Q1 2018 Newsletter for detailed instructions on how to get relief from these faster grabbing surcharges.

Personal Spring Cleaning in the WinterUnsubscribe monitor-608241__340

Personal Reminder Email Tip

In our post mid-month here we discussed cleaning your emails to lower the Tidal Wave of daily emails.

After almost four weeks we are down to a trickle.

What was most interesting were the different experiences of who was up front and nice about the “Unsubscribe” request and who was down right dirty about letting us off their list. Surprised and disappointed with some companies.

Capital Market Comments

VIX – Fear Index Goes into Hibernation

We initially wrote in our Newsletter article and Blog post here, the VIX went to sleep … after another few closes below 10, we are coining it “Hibernation”

VIX as of 12-15-17

From 1990 to 2016 this Fear index closed below 10 a total of 9 times. During the year 2017, it has closed below that level 52 times and counting !!

Wow … Hibernation!

Interest Rate Increases

Just few years ago, with former FOMC (Federal Open Market Committee) chair Ben Bernanke running the show, a miscalculated mention of a pending interest rate increase threw the Capital Markets into a tail spin – and that was just a mention of one small .25% increase. WOW-

When the history books are written on this period of time, FOMC members “Listening” to markets may be prominent, and possible reason for success.

In 2017, the FOMC raised rates 3 times with very little market disruption. They are on record for 3 more in 2018. The best part of this, market participants are not throwing a hissy fit and seem to be welcoming the increases.

Today, we think NOT increasing the rates as forecasted would cause more harm than increasing – exactly the opposite of just a few years ago. Way to pivot FOMC officials.

2017 Fed Funds Rate Bar Graph

 

Happy 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.
www.jkfinancialinc.com
www.street-cents.com

Interesting comments from CEO of Mortgage Real Estate Investment Trust

Each year we are kindly invited to a terrific event of publicly traded companies by our friends at Three Part Advisors.

This year the event featured over 70 companies, mostly of smaller capitalization. We enjoy going to this event as a terrific way to really get into the weeds on what is going on in the Economy as well as learn more about the companies themselves.

Chance meeting and lunch Dynex CEO

One of the favorite sessions featured the CEO and Chairman Byron Boston. Luckily, after his discussion, we sat together at the same table for lunch … extending thoughts and comments from his public discussion.person-boston

As chairman of a publicly traded Mortgage REIT (Real Estate Investment Trust) Mr. Boston had/has (rates greatly affect his company) very strong opinions on rates among other things.   Of course our ears perked up when Mr. Boston gave his views and even some forecasts …

  • Rates will be lower longer this cycle
  • Highest rates of his lifetime (Wow- big statement) are in last 15 years
  • Global growth is coming, but more fragile than many think
  • Inflation will not get above 2%
  • Globalization has created an irreversible connectedness between our economy and the rest of the world (We could not agree more!)
  • If inflation goes over 2%, rates will go higher as well- I asked the question, but he did not think inflation would get over 2%

At lunch we had more candid hot topic conversations beyond my comfort zone of our blog.

We were VERY impressed with Mr. Boston. He gave his distinct thoughts with triggers for being wrong and right for that matter …. what is not to like!

We will code this forecast and check back again later to see how well Mr. Boston did !

Have a Great “More Rate Clarity” Day!

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
www.street-cents.com

Timely discussion of Rates this week … Friday … Travels on the Horizon …

Our Hmmm interest Rate post on Wednesday of this week turned out to be a bit prophetic as Wall Street Turned their “Short Term” eyes toward rates and raised a brow.

JPMorgan Rate Chart

While rates MAY eventually provide a headwind to capital markets, we agree with our friends at JPMorgan and their excellent chart showing MUCH higher levels of rates will be a formidable headwind.

jpmorgan-rates-too-low-graphAhhh… Today is a Friday, and travels are on the horizon next week, but that is next week… Enjoy your Friday, your weekend, and time with those special!

Have a Great Friday!

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
www.street-cents.com

 

Hmmm … Rates are slowly rising … A good thing!

We have long crowed that low rates were great to get us out of the great recession of 07-09, however they have caused more harm than good by being too low for so long.

Rates are Creeping Up

Higher interest rates can be a function of inflation, growth or expansion. These are missing components of our post great recession recovery.

But Wait!

10-24-17 10 Year Treasury

Yes, we have been here before, let’s keep an eye on this most recent move, as you can tell from the chart, a move above the current level may mean higher again!

Have a great, sneaky higher rate day!

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
www.street-cents.com