Renters Are Safe Again — For Now

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As of December 31st, the nationwide eviction moratorium imposed by the Centers for Disease Control and Prevention was set to expire. This would grant millions of landlords the power to evict tenants who are behind on rent by several months and are unwilling and/or unable to make their payments. 

Without an extension, even MORE millions of Americans would quickly find themselves on the streets, thus creating a new homelessness pandemic (on top of the health pandemic we’re facing right now). 

But according to the new stimulus bill passed by Congress, it is believed that the moratorium is being extended all the way to the end of January 2021. Here is how that’s going to happen, according to MarketWatch:

“…those involved in lobbying efforts on behalf of renters said the stimulus package is expected to provide $25 billion in emergency rental assistance and extend the deadline to use relief funds set aside in the CARES Act. That’s in addition to another round of stimulus checks (this time capped at $600) and a 10-week period of $300 in pandemic-related jobless benefits.

Yet according to several experts, this is nothing more than a band-aid solution to solve an ever-growing problem:

The $25 billion in emergency rental assistance is a bandaid on a wider problem, said David Dworkin, president and CEO of the National Housing Conference. Dworkin noted that the bill is ‘a practical start for staving off the immediate threat of mass evictions across the country.’”

“’More will be needed to prevent housing insecurity for millions of low- and moderate-income households who are managing the economic fallout of the pandemic,’ he said.”

For months now, housing advocates and industry officials had called for lawmakers to pass $100 billion in rental-related relief. The National Low Income Housing Coalition estimates that renters will owe between $30 billion and $70 billion in back rent by the end of December.”

And get these numbers from CNBC, which really go to show just how bad the situation is right now:

“Approximately 30% of renters said they had no confidence they would be able to pay next month’s rent, according to a newly released survey by the US Census.

That survey also showed that 18% of current renters are behind on their monthly payments. That represents 19 million people in about 8 million households.”

There’s no telling what will happen at this point, considering that the entire stimulus bill as a whole is a band-aid. $900 billion is nothing compared to the $2 trillion being negotiated over the past 90 days, and it’s very obvious that a THIRD stimulus bill will have to be signed to make up for the lack of funds provided by the second bill. 

Renters are hurting, and so too are the landlords. Without the rent payments they are desperately behind on, they may have no choice but to kick out the tenants who are paying their bills on time. And if that happens, it will be a terrible start to the new year. 

What do YOU think about the ongoing rent crisis? Will it be solved, or will we see millions of homeless Americans start appearing out of nowhere? Reply to this newsletter and share your predictions with us!

The Stock Market Was Somewhat Flat Yesterday…

Monday was FULL of news that took the financial markets in multiple directions, ending with a slight loss. 

Here are the most important numbers you need to know about:

  • Dow Jones: 0.1%
  • S&P 500: -0.4%
  • NASDAQ: -0.1%
  • Travel stocks: -1.5% for American Airlines, -1.6% for Norwegian Cruise Lines
  • Tesla: -6.49%

Despite the good news from the second stimulus bill being passed, with payments set to take place early next week, we have some bad news from the brand new mutation of COVID-19 being spread around. We don’t know how deadly it is yet, but supposedly it is 70% more transmissible than the original strain of COVID-19. 

Tesla also had a VERY bad first day being listed on the S&P 500, primarily due to news of tech competitor Apple taking their own interest in producing autonomously driven electric vehicles (more on that later in this newsletter). 

All in all, the markets continue to be in a state of uncertainty. No telling what will happen in the future, but for now, don’t put too much of your energy into it. 

Apparently, Apple Now Wants to Enter the Electric Vehicle Sector…

So let’s talk about Apple and how they are supposedly responsible for a terrible first day of stock market performance for Tesla. 

According to Reuters:

“Apple Inc is moving forward with self-driving car technology and is targeting 2024 to produce a passenger vehicle that could include its own breakthrough battery technology.

The iPhone maker’s automotive efforts, known as Project Titan, have proceeded unevenly since 2014 when it first started to design its own vehicle from scratch… Since then, Apple has progressed enough that it now aims to build a vehicle for consumers, two people familiar with the effort said, asking not to be named because Apple’s plans are not public.

Central to Apple’s strategy is a new battery design that could ‘radically’ reduce the cost of batteries and increase the vehicle’s range, according to a third person who has seen Apple’s battery design.”

This is a big move for Apple, and quite an ambitious one. They will need to have some VERY heavy reliance on third-party manufacturers who will build the cars to supplement their battery technology. This won’t happen until 2025, so perhaps there’s nothing to worry about for now. 

Yet it will be interesting to see if they can even become competitive in the electric vehicle sector. And if they do, the battle between Apple and Tesla will be one worth grabbing the popcorn for…

A 10% Gain for the S&P 500 in 2021?

So how high can the S&P 500 go in 2021 after achieving record numbers in 2020? According to several financial experts who were interviewed by Barron’s, it has plenty of room for upward growth. From MarketWatch:

“Barron’s recently surveyed 10 market strategists and chief investment officers at large banks and money-management firms on the outlook for 2021. Averaging their year-end S&P 500 forecasts, which range from 3800 to 4400, the group expects the index to rise some 9% next year, to about 4040. 

Add a dividend yield of around 2%, and US stocks could return a total of 10% to 11%—no mean feat after this year’s 17% return, which lifted the S&P 500 to 3700 through Friday.”

The experts from MarketWatch also have their own reasons for believing the S&P 500 will grow in 2021, but maybe not by 10%:

“By the back half of 2021, as the pandemic fades and the economy reopens, it should be much easier to find companies with rapidly growing earnings, our forecasters say. 

Industrial outfits, retailers, banks, and other businesses far beyond tech could benefit from pent-up demand and easy year-over-year comparisons. And their stocks are much cheaper today than those of the market’s tech leaders. Don’t expect buyers to wait until late in the year to scoop up their shares.”

But I’m curious to know: What do YOU think will happen to the S&P 500 in 2021? How far can it climb? Reply to this newsletter and share your predictions with us!

Traders at Goldman Sachs Are Poised to Receive a Generous 20% Bonus

For the traders at the big institutional banks who successfully navigated the stock market and its wild fall – and rise – in 2020, they could be in line for receiving a fat wad of extra cash as compensation for their efforts. The bonuses could jump as high as 20%, specifically for Goldman Sachs

From ZeroHedge:

The bonuses are a result of a 49% rise in revenue for the division, according to Bloomberg. Some niche areas of trading, like fixed income, ‘could expect much bigger payouts’, the report notes, as Goldman seeks to prevent its key traders from moving to rivals like Citadel and Point 72.

“Bonuses will be contingent upon how the firm handles ‘any setbacks’ over the last few weeks of the year – but given the Fed news on Friday, and Goldman’s subsequent announcement that it would immediately restart buybacks – it looks like it could be smooth sailing into 2021 for the sector… JP Morgan is also boosting bonuses for sales and trading workers by 15% to 20%.”

It must be awfully nice to work in a white-collar industry that very clearly benefitted from the COVID-19 pandemic as a whole. And moreover, in an industry where bonuses are the NORM for anybody who does a decent job at their workplace…

Dividend Stocks: Is It Possible to Earn $500/Month?

The Motley Fool continues to be heavily bullish on dividend stocks, noting how making the right choices and investing enough money can help you generate a lucrative passive income stream. 

According to their experts, it’s entirely possible to reach the $500/month level in four easy steps…

Choose a dividend fund instead of handpicking individual stocks: “Reputable fund families like iShares, Vanguard, and Schwab have low-fee options with distribution yields of 3% to 4%. Examples include iShares Select Dividend with a yield of 3.8%, Vanguard High Dividend Yield with a yield of 3.17%, and Schwab US Dividend Equity, with a yield of 3%.”

Set a savings target: Let’s use iShares Core High Dividend ETF as our example. This fund has a strong distribution yield of 3.95% as of Nov. 30, 2020. Your goal is to earn $500 monthly in dividends, which translates to $6,000 annually… Sticking with the 3.5% yield estimate, you’d need about $170,000 worth of HDV shares to throw off $6,000 in annual dividends.”

Set your investments on autopilot towards a tax-advantaged retirement account: If you have 20 years between now and retirement, for example, you can get to $170,000 by saving about $330 monthly, assuming the fund grows at 7% annually on average. This fund’s five-year average annual return is 6.93%, and it has returned 9.44% annually since its inception”

Periodically monitor your investments over time: “… all you have to do is wait, watch, and adjust. Check in on the growth of your dividend fund position periodically and recheck the numbers to ensure all is going according to plan. Know that your growth won’t follow a straight-line trajectory… Don’t be scared off by shorter-term market downturns.

Not a bad plan overall, but it does highlight how you need to have a LOT of money in dividend stocks before they turn over a meaningful profit for 100% passive income. For those of you interesting in this investment vehicle, you’d better start investing NOW!

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