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Climbing Interest Rates Threaten to Shred the A-Plan

  If you’re a United Airlines pilot, specifically an ex-Con and you know who you are, watching interest rates go up and the balance of your defined benefit pension drop, is somewhat startling. What are you to do? There’s a saying in the business, an airline gets the union they deserve, and during the financial crisis of 2008, the great relations that existed between Continental Airlines and their leadership team was about the only major airline to hold onto the lump sum for their employees. Gordon Bethune, Herb Kelleher and subsequently Greg Brenneman, they were the gold standard in airline management. Both Southwest and Continental survived that awful period better than anybody else. Now ex-Cons, as I said, you know who you are, their lump sum was frozen. But at least it existed. They had benefited subsequently from a systemic fall in long term interest rates that just kept coming…

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A Fantastic Jobs Report Adds Further Upward Momentum for Inflation. How to Protect Yourself.

  We’ve got a new jobs report and an inverted yield curve. How is that going to change things this year? Yesterday’s jobs report announced a 3.6% unemployment rate. Now that’s remarkable in any time. In the United States, a large country, that’s just 6 million people unemployed. To put this in perspective, there are 11.3 million job openings in the country right now. What does that mean? That translates into what has proven to be a red hot job market, like nothing we’ve ever seen before. Now interestingly, there’s another almost 6 million people who are out of work, but not looking. And if you do the math, the unemployed, the out of work not looking, and the job openings match almost perfectly. The challenge is getting them back, and a large part of the challenge is a lot of those unemployed are young mothers, young families, or other…

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Fed to Investors: Just the Beginning

  The Federal Reserve has increased interest rates against the backdrop of war and recession risk. How’s this going to affect you? What should we do about this? The Fed has increased the rates one quarter percent. It’s the first of projected eight increases for a total increase estimated to be 2% of the rest of the year. This is against a backdrop of US mortgage rates that have topped 4%. Gas prices are above $4.00, oils above a hundred dollars. We’ve got supply chain and labor shortages. And of course, we got this war in the Ukraine. So there’s a lot of uncertainty in the environment. The challenge for the Fed is slowing inflation without tipping the economy into recession. Now, any economic historian will say, “If you go back 50 years or 70 years, the Fed typically doesn’t pull this off. They typically nip the inflation in the…

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Mother Russia An Outsized Threat?

  So Mother Russia has a big problem. How’s that going to affect you in the portfolio? Hello, my name’s Paul Carroll, the CEO and Founder of Avion Wealth, an elite wealth management firm here in Texas. President Putin has recognized two Eastern provinces as break away states, something I might add that the Ukraine doesn’t agree with. He’s painted himself into a corner domestically, and anybody who saw yesterday’s monologue is right to be very deeply disturbed. For the first time since he took over as the President of the nation, he appeared to be somewhat unhinged. Now, Europe has further compounded the problem with their aggressive turn from nuclear power over the last few years, especially after Japanese disaster. This happened before green alternatives existed. Not only have they ramped up the use of coal, but they’re extremely dependent on Russian natural gas. And despite that natural gas,…

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Tax Season Tips

Tax time is just around the corner. Here's a couple of pointers that may help mitigate the cost and difficulty of preparing your taxes this year. We've got a lot of different clients with a lot of different desires when it comes to how best to file their taxes. Some clients, every single document, as soon as they get it, they send it to their CPA. Something to keep in mind is when the CPA opens up that envelope, it's going to hack the clock and probably most CPAs have a minimum of 15 minutes, so you can start seeing where we're going here. Bundle the documents. You may send one bundle late January, another bundle late February, and another bundle late March. But bundle the documents because the less envelopes that CPA opens, the less it's going cost you. The second challenge we have is that the IRS requires...
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A Tough Ten Days For Tech… Is This The End Of The World Or An Overdue Reset?

  It’s January the 25th, Tuesday afternoon. It’s been a wild ride. This video will probably go out Wednesday morning. If you’re in tech these last 10 days, you’ve really been spanked, but Tech’s been over value for so long. The market has been hard for everybody. Is it the end of the world or is this just an overdue reset? Hello, my name’s Paul Carroll, the CEO and founder of Avion Wealth, an elite wealth management firm here in Texas. On January the sixth, we put out a blog video, cautioning investors that they’re going to take away the punch bowl, that the fed has had enough. And that tech is almost certainly going to get hurt, pretty much chapter and verse. It’s not often you can make a call that precisely. So the question now, are we going through the great reset in the market? You know, we’ve…

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What If Congress Bans the Roth 2-Step, the Backdoor Roth in 2022?

  What happens if Congress bans the backdoor Roth, otherwise known as the Roth two-step in 2022? Hello, my name is Paul Carroll, the CEO and founder of Avion Wealth an elite wealth management firm here in Texas. Now the Build Back Better Act is pretty much stalled, but it hasn’t gone away. And in both versions, both the House and the Senate agree on one thing. And that is the elimination of both the backdoor Roth strategy and also what’s known as the mega-backdoor Roth strategy. So first what’s a backdoor Roth? All a backdoor Roth is, is taking advantage of different rules to put after-tax dollars into a traditional IRA, and then subsequently convert those after-tax dollars in that traditional IRA to a Roth IRA. It’s a tax-free maneuver, and it gets around the income limits for making direct contributions into the Roth IRA. The mega-backdoor Roth is…

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Is Yesterday’s Market Rout a Portend of Things to Come in 2022?

  Yesterday saw the biggest tech selling rout in over a decade. Is this a portend of 2022, is this what we should expect looking forward? Hello, my name’s Paul Carroll. I’m the CEO and founder of Avion Wealth, an elite wealth management firm here in Texas. Happy new year. Yesterday, the fed released its minutes from its policy meeting, clearly indicating they’re going to be raising interest rates here probably sooner than later. Now, frankly, unless you’re in a COVID induced coma, this shouldn’t be news to you. It’s in the news. They’ve been talking about it. They’ve been criticizing the fed for a year. Of course, it was going to happen. It’s happening all over the world. I’m enthusiastic though. 2022 is probably the end of the pandemic. What we’re seeing with this Omicron is greater infectiousness, but milder symptoms. We are evolving from pandemic to endemic. Now,…

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Is 6% Inflation the New Normal?

  With headline inflation at 6%, is this now the new normal? And what does this mean for you and your portfolio? So why do we have this inflation? Really, there are three reasons. One, we’ve been printing money. We’ve needed to do asset purchases, which is code for the Fed buys bonds in the open market as a way to inject capital into the system. This saved the country from a depression when the first shutdown occurred in March last year. It’s always easy to start this money printing., it’s harder to taper. Second, and this has gotten almost no airplay because it’s so bipartisan, it appears, but every economist is choking on the concept, and that is tariffs. When the Trump tariffs came in and they have been maintained by the Biden administration, that basically increased the cost of everything that had a tariff applied. Tariffs are insidious…

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