PANDEMIC LOCK-DOWNS MAY RESULT IN PERMANENT CHANGES
It has been just over 12 months since the COVID-19 pandemic hit the US. During that time, many states and major cities may have been changed forever. Let’s take New York City as an example. Since the pandemic hit in March of 2020, New York City has:
- Lost 500,000 private sector jobs
- Lost over 10,000 small businesses
- Lost 5,000 restaurants
- Lost $70 Billion in tourist revenue
- Lost 85% of the office workers who work in the high-rise office buildings
Many who worked in the big city office towers have discovered they can work remotely from home, and their employers are realizing they may not need to pay the exorbitant leases to occupy the downtown skyscrapers.
In New York the top 5% of tax payers pay 62% of the state income taxes. Unfortunately, over 300,000 of the residents who live in New York City’s high income neighborhoods have filed changes of address with the post office. People are moving to other states for many reasons, but one of the reasons is to get relief from onerous state income taxes.
In 2020 the states most people MOVED AWAY FROM ARE:
#1 California and #2 Florida
The states most people MOVED TO ARE:
#1 Florida and #2 Texas
Elon Musk, founder of Tesla, moved from California to Texas, and suggested he might also move his business to Texas. Recently, Florida’s chief financial officer jokingly invited the New York Stock Exchange to relocate to Miami.
The interesting thing about all of this is that one state’s loss is another state’s gain. We’ve also seen that many times one company’s loss is another company’s gain i.e. high rise office leasing may be down, but Zoom conferencing is on the rise. Our portfolio managers are constantly looking for opportunities to improve the holdings in your investments by taking advantage of anomalies like this. We also include international funds in our portfolios, because sometimes one country’s loss is another country’s gain. Rest assured, we are keeping a close eye on events that could affect your portfolios.