With the Fed about to raise interest rates, where do we go from here? Last week saw significant volatility in the equity markets and the Fed has told us this week to expect up to a 0.5% bump in interest rates. Are we seeing a correction? GDP contracted last quarter by 1.4%. The Fed’s quantitative easing is coming to a slow end, and we now have increased interest rates baked into the cake. Could any or all of this drive us into a recession? Higher interest rates, inflation, recession. This begins to sound like the stagflation of the 1970s. If so, it’s going to be a paired down version. That was pretty awful. What we have today is quite different. We have supply and labor shortages. This implies a new higher base rate for inflation in the decade to come. But when I say a higher base rate, I…

Here’s an exercise you may find informative. Ask a couple friends what happened to the stock market in 2020. You’ll get a wide array of answers, but here’s an answer you’re unlikely to receive: “The S&P 500 rose 16.26% in 2020, an above average annual return and a good year of market performance by any standard.” Why shouldn’t we expect this answer? It likely has something to do with the sharp pandemic-induced 34% drop we saw at the beginning of 2020, which comes to mind quicker than the gains the index posted by the end of the year. Unfortunately, as human beings, our brains aren’t hardwired for good investing. Studies show that human beings find a 1% loss to be more painful than a 1% gain is enjoyable – this leads us to focus on potential losses (because they have a greater emotional impact on the human mind) more than we focus on potential…

Paul visits The Legal Fix with Bruce Tough for a fun discussion about his new book: “Tips & Traps Selling Your Business”. For more information about Tough Law Firm and The Legal Fix click HERE.

  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…

  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…

  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…

  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,…

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...

  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…

  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…