October 2023

On Friday, the S&P had slid 10% from its high. What does that mean for you and your portfolio? On July 31st, the market was at 4,589. On Friday, it was 4,117. Today* it's actually bounced back a little bit. Whenever the market drops 10%, we seem to forget the fundamentals. Now is a good time to discuss what this in fact means. Let's start from a historical perspective. When we build an asset allocation, it is designed to stand the test of time. It is not designed to identify when the market is going to move. We'll talk about later why that's such a difficult challenge. It's always important to acknowledge the emotional component. When we make decisions based on market moves, we have now migrated from long-term investing to emotional investing. We need to keep in mind we have a diversified portfolio and not all asset classes are...

Recently, the Social Security Administration recalculated the benefit for Social Security and Social Security supplemental income recipients in 2024. Social Security Adjustment for Inflation for 2024 For 71 million people, there'll be an average 3.2% increase in their Social Security benefit in 2024. On average, that'll be $50 a month. But if you are a higher earner during your working years, that could easily exceed $100. COLA notices are probably going to go out from the administration in December. On the other hand, the maximum earning, subject to the Social Security tax, is going to increase next year to $168,600. Fortunately, the tax rates will remain the same. So that's a mixed bag. Really, it's the same as this year, adjusted for inflation. Clearly, whether you're getting a benefit or paying the tax, these are inflation adjustments in real dollars. There's no change. However, what is important is to understand...

If you're alive, if you've got a pulse, read the news, or looked at the credit card statement - you know that interest rates have come up. Long-term rates are up, short-term rates are up. This has caused all sorts of distress and it's interesting. Why? These interest rates today historically are fantastic and I would argue that they're healthy in the long run. Why would I make the case that interest rates as they are today are a good thing?  Well, we really have to get down to fundamentals. I'm going to try to avoid too much theory here, but interest rates are the price of money. In the market economy, price signals are crucial to the allocation of scarce resources. In this case, the price signal is interest rate, and the scarce resource is money. Now, prior to this hugely inflationary period, there was something running around the...

  Last week I came back from a great vacation to Greece, and of course, I always leave with a reading list. And in that list was an interesting book called The Missing Billionaires by Victor Haghani. I learned some very interesting lessons that I want to share with you. I read prolifically, and I've gotten to the point now, I can get into the beginning of a book and decide quickly that there is no more intel for me. But Victor Haghani, who I'd never heard of, actually possesses quite the resume. He's a superstar trader with enormous success and also some pretty big failures. He was at Long-Term Capital Management when they had their spectacular wipe out in 1998, where they wiped out something like 90% of the value of the fund overnight. So Victor learned a few things, and I found it just a fascinating lesson. The...

The term "soft landings" has been echoing frequently in recent news. However, the irony lies in the fact that the more we hear about it, the less likely it seems we'll experience one. Today, I aim to shed light on some of the pressing market concerns and their potential implications. Economic Indicators The financial landscape is undergoing a significant shift with the end of what many term as "free money." Interest rates are on an upward trajectory, signaling the culmination of an era characterized by easy money. While I believe this transition might be beneficial in the long run, its immediate repercussions can be unsettling for many. Homeowners might witness a dip in their property values, and the process of securing mortgages could become more stringent. Several economic indicators are currently under the spotlight, warranting our attention. Rising interest rates, for instance, are incrementally increasing costs for corporate America, acting...

We call September storm season here at Avion. I'm going to tell you why. The September Effect For at least 100 years now, September's been the worst month of the year for the market. Since 1928, it's been down 52 times. In fact, its ratio of down years to up years is 60/40. 60% of the time you'll lose money in September. There's even a term for this. It's called the "September Effect". So, this year we had a couple of  hidden factors. Through August, we had this AI driving rally. Any stock with AI related to it really did well. There's been a bit of a pullback, and towards the end of September, it really began to sink in that the era of free money is over. Globally, stocks pulled back a little bit as a result of that realization. That could be fairly permanent. The good news though...