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Lone Star Point/Counterpoint

Dear Rundown Reader,

More readers on moving because of high state and local taxes:

“Please don’t forget Texas!! Climate is much better, plus no state income taxes.”

Another reader really did his homework and holds the opposite view on Texas:

“We did this three years ago – decided to move from Texas where they were charging us over $20,000 a year for property tax! Just because we wanted to live in a nice house with extra land.

“So I did some research and Alabama came up number one. We moved to Florence (far northwest corner of the state) and have loved it.

“Tennessee River – very regular rainfall  – large beautiful trees – rolling hills and great weather.

“Electric and water are cheap!

“Our yearly savings on property tax and utilities alone is running $19,500 and that’s adding back in the cost of the state income tax we have to pay.”

Our last reader questions tariffs and government revenue:

“I have been wondering. If our deficit is so high and Trump is imposing such high tariffs on China, what’s he doing with the tariffs he’s collecting?

“If we get 10% in tariffs on $200 billion, that should give us $20 billion extra cash.

“Shouldn’t we be using those ducats to pay down those deficits? Hmm…”

The short answer is there won’t be any “extra money” from trade-war tariffs.

Theoretically, at least, tariffs are intended to change the flow of goods.

By making foreign products more expensive for American consumers, comparable American-made products will be priced to sell.

That’s the simplified version.

This week, President Trump ordered tariffs on an additional $200-billion of Chinese goods to go into effect on Monday, Sept. 24.

Tariffs will start at 10% and then climb to 25% on Jan. 1. The biggest tariff increase will come after the holiday shopping season. And after midterm elections.

Trump’s open to negotiations. Whether China’s ready to cry uncle remains to be seen.

Do you think the trade war’s working? And do you think China will come to terms with the U.S.?

Your Rundown for Thursday, September 20, 2018…

Trade-War Champ: “Who are YOU?”

The surprising best-performing Dow stock this month is heavy-equipment manufacturer Caterpillar Inc (CAT).

Shares of the company fell off in June based on trade-war concerns; so far this month, shares have rallied 7%.

Trade War

One of the most attractive things about the company is its dividend.

Caterpillar’s paying out a dividend of $0.86 per share right now; its dividend yield is 2.37%. Compare that to its sector’s yield of 1.06%

As for dividend growth, Caterpillar’s annualized dividend of $3.44 is up 11% since 2017. And the company’s increased its dividend 4 times over the last 5 years with an average annual increase of 6.15%.

One of the most impressive things about Caterpillar is its earnings forecast, expected to increase almost 70% over last year.

Caterpillar’s a good position to add to your portfolio because of its income-generating possibilities — even amid trade-war drama.

Market Rundown for Thurs. September 20, 2018

S&P 500 futures are up 17 points to 2,925.29.

Oil gained 34 cents to $71.46.

Gold sits at $1,212.00, up $3.70.

Bitcoin’s even up by $30 to $6,429.79.

Have a great day, we’ll catch up tomorrow.

For the Rundown,

Aaron Gentzler

Aaron Gentzler

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Aaron Gentzler is the publisher of Seven Figure Publishing. He is also the editor of The Rundown. Aaron’s been with Agora Financial/Seven Figure Publishing for 13 years. He's been covering technology and markets for over a decade.

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