Skip to main content
All Posts By

Avion Wealth

No Time To Panic!

The Dow Jones is down more than 1,300 points this morning. This is no time to panic. Hello, my name's Paul Carroll. I'm the CEO and founder of Efficient Wealth Management, a boutique wealth management firm in South Texas. The first thing to keep in mind when we see the news is points and percent are not the same. The media is all about advertising. It's about fear, and fear I define as false evidence appears real. Yes, the Dow is down 2% today, 3% on Monday. That sounds so much less painful than 1,300 points. We do have an inverted yield curve. I'm sure everybody's heard about that, and all that means is that we're probably going to get a recession. We're probably going to get an earnings recession. This is not going to be a 2008 meltdown, and that fact is very much evidenced by the strong showing...
Read More

Sell-off Creates Opportunity for Portfolio Check-up

The sell-off pre-Thanksgiving has certainly created an opportunity for portfolio checkup. Hello, my name is Paul Carroll. I'm the CEO and founder of Efficient Wealth Management. Until recently, as we've talked about before, the FAANGSs have defied gravity and they've done this as other assets have stumbled leading to some frustrating tracking error. The S&P 500 has been pulled up by the FAANGs. The rest of markets, global and domestic, have fallen behind. That tracking error appears to be ending. Fortunately, for the last year or so, we've been persistently trying to de-risk clients, especially those with concentrated holdings. Now, with the market correction definitely in play and the price of oil tumbling, we're beginning to see a certain amount of normalization of asset valuations, especially international. This is a wonderful opportunity, finally, to get some good rebalancing in, to take some tax losses. We call this tax harvesting. To...
Read More

Holiday Spending Tips for 2018

It's that time again, it's almost Thanksgiving, and Thanksgiving means Christmas shopping, and our experience has been once the Christmas shopping has started, any chance of getting the spending under control is over. Want to briefly go over seven tips to help you prepare financially for the holidays. First, try to take a look at what you spent last year. Were you happy with what you spent? If you were, then do what you did last year, that's simple. If not, number two, start making a budget and gift list now. Shopping is an arms race. Once you've bought something for Uncle Fred, you have to spend at least as much for Aunt Mildred or whoever the relatives are, so we need to get this under control right now. Figure out gifts, decorations, foods, activities, donations. Three, set aside the money. Set the expectations early, work from the end game...
Read More

Big Tech’s Sell-Off: Wobble or Wipe-Out?

The FAANGs, part two. Is the party over? Hi, my name's Paul Carroll, I'm the CEO and founder of Efficient Wealth Management. Back in June we sent out a couple of videos discussing how the FAANGs are lifting the market and growth-oriented indexes. And of course, the FAANGs are Facebook, Apple, Amazon, Netflix, and Google. Rarely has so much money been made by so few stocks and for such a long period of time. It's really unprecedented. In fact, since 2013 a full 37% of the rise in the S&P 500 were just those five stocks. Less we think it's a US-only phenomena, in China, 28% of the rise of debt equities in the same period of time, just two stocks, Alibaba and Tencent. And Alibaba of course, is their Amazon but bigger. Since September, the medium value of these five companies just dropped over 21%. We have seen almost...
Read More

Is the economy slowing down?

The S&P 500 fell 7.3% in October, and other indices fell even more. Is the market forecasting a downturn in the economy? Hello, my name is Paul Carroll. I'm the CEO and founder of Efficient Wealth Management. The first two quarters of the year showed above average growth. Can it last? We would expect with the tax cuts that you would get a boost in growth, and most economists feel that that's going to wash out by 2019. Normal GDP growth is the function of two things: productivity and the working age population. Typically, in a country as developed as ours, 2% is a pretty good standard for long term growth. That doubles the size of the economy every 30 years. The legacy of the tax cuts probably more than anything will result in weaker finances with which to deal with a future downturn. There are three forward looking growth...
Read More

The Market is Down 3.3% and We’re Not!

Yesterday the market lost 3.3%, we didn't. Hello, my name is Paul Carroll, I'm the CEO and founder of Efficient Wealth Management. A quick recap, yesterday the S&P 500 lost 3.3%, the euro is up about half percent, which is great because that has offset euro losses for a net of just one percent, an example of the importance of international diversification. In fact, euro denominated bonds rose last year. The president right now is busy busting the feds chops and it's not really fair because the feds job is to control inflation. The problem is when you pour gas on a fire through huge tax cuts, you're going to have inflation if you don't do something and sure enough it's feeding through the economy, the fed has seen the warning indicators and has raised short term interest rates as a result. You can't create wealth overnight and the fed...
Read More

It’s a Great Market- What Happens When The Party’s Over?

With the S&P 500 hitting new intraday highs, these are great times to be invested in domestic equities. But what, if anything, could go wrong? Hello, my name’s Paul Carroll. I’m the CEO and founder of Efficient Wealth Management, a boutique wealth management firm here in south Texas. Today is Friday, August 24, and the S&P 500 hit an intraday high of 2,873. It’s too early to tell how it’ll end the day or the week, but clearly the market is bouncing along new highs as we progress. What is going on? Well, the world is healing. It is post-2008, and there’s a strong domestic and international economic tide. It is definitely raising all boats. Yesterday, Fed Chairman Powell indicated that inflation is not really a concern. Now that may or may not be a slightly political statement to protect the independence of the central bank, but he was quite...
Read More

Emerging Markets hit by the Tariff Roller Coaster – the impact on your portfolio

How are emerging markets holding up in this new world of potential increased tariffs? How is this going to affect your portfolio? Hello. My name's Paul Carroll, the CEO and founder of Efficient Wealth Management. In the past 45 days, we have seen a modest sell-off in emerging markets. Is this the beginning of something worse, or is it just a blip? In some emerging markets such as Vietnam and Malaysia, exports make up the bulk of their gross domestic product. These countries are in the early life cycle of a developing economy, one where they're using exports to create a domestic economy and a domestic middle class that can sustain itself in the future and, even better, import from other nations in the coming decades. This is a story we've seen in the past — even in the United States 150 years ago, when we were an emerging economy...
Read More

Are Market FAANGs Artificially Boosting Returns?

One of the indications of a late-stage bull market is that returns are concentrated in just a handful of stocks. Hello. My name is Paul Carroll. I’m the CEO and founder of Efficient Wealth Management, a boutique wealth management firm here in South Texas. So right now, everybody’s talking about the FAANGS—Facebook, Apple, Amazon, Netflix and Google. That’s where all the returns are. In fact, without the FAANGS, the S&P really has no teeth. We’re seeing, outside of that small handful of companies, really flat markets since late last year. On the bond side of course, we’re having to go short. What that means in English is only the short maturities are safe. Because if those interest rates do continue to rise, then the principal value of the bonds is damaged. So, there’s always the logical question: Why did you get me out of Apple, or why didn’t we get...
Read More

Pilots, Say Goodbye to Your Per Diem Deduction!

If you're a pilot with United Airlines, Southwest, American, or any of the other major carriers, I think it's time to say goodbye to the per diem deduction. Hello, my name is Paul Carroll. I'm the CEO and founder of Efficient Wealth Management, a boutique wealth management firm based in South Texas. The Tax Cut and Jobs Act eliminates itemizing for ordinary necessary business expenses paid by pilots. The per diem reimbursement that you receive from your airline is still not taxable. And that's great news. But unfortunately, effective January 1, 2018, pilots can no longer deduct the delta between the per diem reimbursement and the actual business travel expenses incurred. Well, to put that in English, if you're an international pilot and you're getting $48 a day for per diem but the expense rate for Narita, for example, of Tokyo, Japan, is $100 — and I'm pulling these numbers...
Read More