Why Investors Prefer Real Estate to Stocks, Bond and Gold
Americans still feel skittish about the stock market. When it comes to long-term investments, real estate is still preferred over cash or the stock market, Bankrate.com reports in a new study. For long term investments over 10 years or more, 27 percent chose real estate, 23 percent preferred cash investments, and 17 percent opted for the stock market. Gold and precious metals came in fourth at 14 percent, and bonds debuted at 5 percent.
Related: Clinton’s Capital Gains Tax Plan Aims at Long-Term Investment
Although the S&P 500 has risen 27 percent over the past two years, Americans were only slightly more inclined to favor stocks in 2015 than they were in 2013.
The only exception to the brick and mortar policy? Households headed by college graduates were the most likely to prefer stocks. In the western U.S., real estate was preferred nearly two to one over any other investment choice.
The survey of 1,000 adults living in the continental U.S. yielded some surprises across gender, age, income, location, and political party. Men were more likely to favor real estate, while women were more likely to favor cash investments.
At 32 percent, the majority of millennials--those between 18 and 29 years old--favored cold, hard cash, while 32 percent of participants between the ages of 30 and 40 stuck with real estate.
Related: U.S. Real Estate ETF Rally Faces Test With Rate Rise
Lower-income workers with salaries of less than $50,000 felt “more secure” than their higher earning counterparts, who were making $50,000 to $74,900. And Republicans were three times more likely to say they felt “less secure” about their jobs as Democrats.
Bankrate’s Financial Security Index for July remained positive for the 14th consecutive month. However the July reading was the second lowest in 2015, due in part to a decline in job security with 22 percent feeling “more secure” about their jobs than 12 months ago and 14 percent feeling “less secure.” Sixty-two percent felt “about the same.”
Quote of the Day: A Big Hurdle for the Tax Cuts
“He goes in and campaigns on an issue, and the challenge is he then talks about executing drug dealers. Why do you think the press is going to cover the tax cuts if you’ve given them the much more exciting issue?”
-- Grover Norquist, president of tax-cutting advocacy group Americans for Tax Reform, on President Trump’s failure to sell the tax law.
The Obamacare Mandate That Could Produce $12 Billion in Fines in 2018
Republicans effectively eliminated the individual Obamacare mandate in the tax package signed late last year. Although the new regulation reducing the mandate penalty to zero doesn’t take effect until 2019, President Trump has cited the rule change as a victory over the health law so many conservatives oppose. “Essentially, we are getting rid of Obamacare. Some people would say, essentially, we have gotten rid of it," Trump told a crowd in Michigan two weeks ago.
However, many parts of the Affordable Care Act are still in effect and will continue to operate even after the individual mandate is eliminated in 2019.
In particular, the employer mandate, which requires companies with more than 50 employees to offer health benefits or face fine of roughly $2,000 per worker, will continue to play a significant role in the Obamacare system. The Congressional Budget Office estimates that the mandate will produce more than $12 billion in fines in 2018 alone.
Some conservative groups are pushing lawmakers to stop enforcing the employer mandate, but the IRS is still working to enforce the law. According to The New York Times Monday, the IRS is sending out notices to more than 30,000 businesses that have failed to comply.
Chart of the Day: It’s Still the Economy, Stupid
Security may be the top policy issue for Republican voters, but the economy is the top concern for Democrats, independents and voters overall, according to Morning Consult’s latest polling on the midterm elections. Health care is third on the list, followed by “seniors’ issues.” The results are based on surveys with more than 275,000 registered U.S. voters from February 1 to April 30.
Number of the Day: $13 Billion
An analysis by Bloomberg finds that the roughly 180 companies in the S&P 500 that have reported earnings for the first three months of the year saved almost $13 billion thanks to the corporate tax cut enacted late last year. Those companies’ effective tax rate dropped by more than 6 percentage points on average. About a third of the tax savings went to 44 financial firms.
How a Florida Doctor with Social Ties to Trump Delayed a $16B Billion VA Project
A West Palm Beach doctor who is friends with Ike Perlmutter, the chairman of Marvel Entertainment and an informal adviser to President Trump on veterans’ issues, has held up “the biggest health information technology project in history — the transformation of the VA’s digital records system,” Politico’s Arthur Allen reports. Dr. Bruce Moskowitz “objected to the $16 billion Department of Veterans Affairs project because he doesn’t like the Cerner Corp. software he uses at two Florida hospitals, according to four former and current senior VA officials. Cerner technology is a cornerstone of the VA project. … Moskowitz’s concerns effectively delayed the agreement for months, the sources said.” Read the full story.