KFA Blog

2017 has Begun

By:  Lisa Thuer - Senior Trading and Research Specialist


What a contrast from how last January started. It is almost the reverse of stocks that were down last year are up this year. As we have stated before, last year was a difficult year to navigate. You may ask yourself, won't this year be just as difficult with the new regime now in office? What happens now and where do we go from here?


Earnings season is upon us and corporate earnings have thus far been positive. Businesses are optimistic with potential tax cuts, infrastructure spending, employee benefit costs and reduced regulation. Bringing earnings back from overseas would be a bonus for shareholders and the stock market. However, this all takes time and we still need to keep both hands on the wheel. We know in the political world not everything gets done as planned nor as fast as we would like it to.


So regardless of your views on our current Commander-in-Chief, we still want America to succeed and we are all Americans. We all want our portfolios to increase regardless of who is in office. Now with all the election noise behind us and some will probably continue, we are moving forward. Towards the end of last year we started adjusting investments going into 2017. There will be additions to current holdings and reducing others. We still continue to like dividend payers, technology, consumer discretionary, financials (regional banks), and small companies. We will continue to hold alternative investments, however we will be reducing our holdings and allocating funds towards growth or income based the portfolio. As stated above, we will remain diversified and weather the storms and the tweets. 


As always, do not hesitate to contact us should you have any questions or would like to come in and meet with a KFA team member.

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Market Commentary: 4th Quarter 2016

By:  Lisa Thuer - Senior Trading and Research Specialist

The year 2016 started out by taking the polar plunge.

China came out with disappointing manufacturing data, sending all markets on a free fall. Analysts and economists reports stated slower earnings and economic growth. The Federal Reserve, after raising rates a quarter point in December refrained from raising interest rates a second time, stating that the economy was too fragile. Yet they were calling for 2-3 rate hikes in 2016, but they only raised rates once. Early in the year markets rapidly dropped day after day, at the same time, oil hit a low of $26 per barrel. Were we on the brink of a recession?

Then in February the whipsaw came; new data stated a recession was less likely than feared and the markets rebounded, however not all sectors participated. Healthcare and FANG (Facebook, Amazon, Netflix, andGoogle) stocks were not taking part in the rally, yet utilities and telecom were skyrocketing. There was a flight to safety and value on the forefront.

All was going well until the next big uncertainty hit the market – Brexit! The markets were rattled leading up to Brexit. As the election was nearing the polls were stating that the U.K. would remain in the Eurozone. The markets reacted positively, but then the votes were tallied, and we soon learned that the polls were wrong. The U.K. voted to leave the Eurozone; the markets were shocked and once again plunged. Financials took a beating and the Federal Reserve decided not to raise interest rates at that point and furthermore no rate hike was insight. We were in uncharted territory and everyone was predicting we are on the brink of a disaster. Once again, this wiped out all of the market gains. After some digesting, all wasn't as bad as first stated, and the market hit the road running, we were upward once again.

As if all this news wasn’t enough for the markets to digest, America was in a very unusual presidential election year. A New York Business Man running against a Woman, with political experience.  But there is no need to go into details about that, as we all know the outcome. Everybody we talked to could not wait for the election to finally be over. But, once again the polls had it wrong, which again sent the markets into a tailspin.  As the market did a complete turnaround and climbed to new highs. Based on optimism, equity markets climbed as the bond prices fell. KFA was feeling a little overdone in both areas and we wanted to let the markets settle down just a bit before jumping back in with both feet.

2016 is now behind us and as we reflect on our portfolios, not only did the economists predict incorrectly, so did some analysts, but we at KFA, also erred on the conservative side. Financials tanked after Brexit in the uncertainty of how banks would be affected by the change. But after the US election of Donald Trump –so far financials have been leading the way. Healthcare stocks took a beating for most of 2016, but since the election we are starting to see some recovery in that sector also. We can’t help but wonder; had Hillary Clinton won… would we be seeing the same results, she made it clear that she was very much against Drug Company’s price gouging. We are not saying that Trump isn’t against price gouging; he just took a different approach on the subject.

In an effort to keep risk out of our clients’ portfolios, it may have kept us from partaking in some of the upside of the market recovery. However we feel that this is a small price to pay for what could have turned in a different direction. We had certain situations that did go south last year, and we wanted to do what we could to make sure that our clients were protected. Even the best of economists and analysts had a hard time forecasting last year, and some were just down right wrong. It was definitely an unusual time. We are seeing that the portfolios which benefited most last year are the ones that did nothing from start to finish and just rode the markets ups and downs.

2017 is now upon us, and this January in comparison to last January, we are seeing a reversal in the markets, we are also seeing green lights ahead. Some areas of interest to KFA are Aerospace, Defense, and Financials (in particular regional and smaller banks). Along with Information Technology (IT), Infrastructure and Small Companies ,while holding on to our Large Cap Dividend payers, which will benefit investors if the overseas earnings are repatriated, bringing offshore monies back to the U.S.

We continue to look for preservation of capital and yield as our conservative portfolios continue to hold a larger portion of their portfolios in these areas. Alternatives and Market Neutral holdings continue to be a part of our portfolio to keep a balance to the uncertainty that always faces us. Bonds and bond funds are known to be less volatile- however as of late even they have seen more volatility than normal.

If only we had a crystal ball to help us predict the future, life would be so much easier. But for now,

we need to go by research, and sometimes even gut feelings, and the knowledge that we need to make money for our clients while we are protecting them from markets down falls.

With the start of a New Year, please consider that this is a good time for clients to review your portfolio risk tolerance. Have you had any life changing events last year or an upcoming event that you know about that has changed or may change your needs? Whichever it may be, the start of the year is always a good time to revisit your risk tolerance.

If you would like to come in, or have a telephone conference with a KFA team member, please feel free to contact us, we love hearing from our clients. KFA will work with you to make the necessary risk adjustments to your portfolio. As always, we thank you for your confidence in us and we look forward to 2017 being a great year! 

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October is Cybersecurity Awareness Month

By:  Jacqueline Whitaker - Business Manager

Cybersecurity can be a scary topic!

There are specters haunting cyberspace in pursuit of your Personally Identifiable Information (PII).  They can curse you by stealing your identity, tarnishing your reputation, and creeping into your bank accounts.

Personally identifiable information (PII), or sensitive personal information (SPI), as used in US privacy law and information security, is information that can be used on its own or with other information to identify, contact or locate a single persons, or to identify an individual in context.  KFA is sober minded when it comes to shielding our clients PPI.  We have procedures in place to help us recognize the ghostly shadows of cybercriminals.  Clients partnering with us in our culture of protection provide the best defense against fraudsters.

Click HERE to view a flyer that will provide more detail on how you can protect your PII and your money.  Fortunately, there are simple steps you can take to thwart the actions of the ghouls and goblins who seek to entangle you in their dark web.

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3 Key Financial Lessons I Learned from Playing Golf


Knowing many of you love golf, we thought you might like this article that shares similarities to finances and investing.


Click HERE to be taken to the article posted on CNBC.com.





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By:  Jacqueline Whitaker - Business Manager

Cybersecurity. Hackers. Phishing. Whaling. Ransomware. Data Breach. Cybercrime.

These are just a few of the words in the “Cyber Speak” lexicon and, sorry to say, they are becoming common words to anyone who uses a PC or mobile device to conduct financial business. Cybercrime is a profitable business for those who practice it. The fraudsters are out there and after your identity. Fortunately, there are steps you can take to protect your valuable personal information from those who seek to steal it.

Even the U.S. government is aware of the risk. An executive order was issued for federal agencies to provide more secure authentication for their online services. Starting in August of 2016, any agency that provides online access to a customer’s personal information must use multifactor authentication. “Multifactor Authentication” means more than one method is used to make sure you are the actual owner of your account. For example, in addition to using a user ID and password to login to a website, you will also have to provide and additional security code that is texted to you before you can access the site.

Your team at Kabarec Financial Advisors takes the threat of cybercrime seriously. We are dedicated to protecting our clients’ personal information and to prevent unauthorized access to their accounts. Some of the methods we employ are vulnerability assessments by qualified IT specialists, use of enterprise antivirus software, two-factor authentication to access the network, and physical securities for our hardware. Our team takes advantage of training opportunities offered by a variety of vendors in order to stay up-to-date in best practices.

For a robust defense against cybercrime fraud, we need our clients to partner with us. Here are few ideas to get started:

  • Install a spam manager, firewall, and antivirus program on your computer.
  • Do not use public WiFi to conduct personal business.

  • Bear with us when we make an extra phone call to verify it is really you requesting to move money.

  • Visit the Schwab Client Learning Center to view the Schwab Security Guarantee and to learn about SchwabSafe multifactor authentication. http://content.schwab.com/learningcenter/index.html

Engage in of our culture of protection by doing what you can to make it difficult for the fraudsters to steal your identity - and your money!


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