Your Best Protection Against a Wealth Tax Is…
When does taxation turn into confiscation?
The answer is very subjective, but I am dismayed at the wealth tax proposals that have been floated by some of the presidential candidates.
Last week, presidential candidate Elizabeth Warren started selling $25 coffee mugs with “BILLIONAIRE TEARS” boldly written on them.
“Savor a warm, slightly salty beverage of your choice in this union-made mug as you contemplate all the good a wealth tax could do,” Warren’s website reads.
Oh, the irony… who but the rich can afford a $25 cup…
Politics and Stocks… This Is What Keeps Me up at Night
Personally, I’m not wealthy enough to be affected by Warren’s wealth tax and I am a registered independent. That’s because I care more about a candidate’s policies than whether there is a “D” or “R” after their names.
That’s especially true as it affects our investment portfolios.
Last week, we saw the Dow Jones Industrial Average, Nasdaq, Wilshire 5000 and S&P 500 all hit all-time highs.
What I am worried about is that some of the political rhetoric I’m hearing is anti-capitalism and therefore anti-stock market.
As you know, I have loudly and consistently told you to stay invested in this bull market.
And frankly, that’s been some of the best market advice on the planet.
And despite the recent political rhetoric it isn’t time to run for the hills. In fact, the yield curve, which drew so much Wall Street angst when parts of it “inverted” three months ago, is no longer inverted and is now very positively sloping. That’s a very positive sign for the stock market.
Prudent Moves Ahead of 2020’s Election
I believe the right move is to avoid more volatile high-risk stocks and instead focus on top-quality, dividend-paying stocks at reasonable valuations.
That’s because whether the 2020 election sends markets soaring or sinking dividends generate income. And dividend-paying stocks have proven to be less volatile AND perform better in down markets than high-risk growth stocks.
Still not convinced? Think about it like this…
Dividend-paying stocks essentially offer you steady income like if you owned a rental property. You, the owner (of the stock or property), will collect regular rent (or dividend) payments regardless of what is happening to the real estate (or stock) market.
Your mailbox is going to get filled with dividend checks because one of the pillars of Wealth Watch is to provide stocks that are right in the sweet spot for market growth and offer significant dividends.
And that means even more capital gains coming our way.
Perhaps we’ll even make enough money to fall into the crosshairs of Elizabeth Warren’s tax gun.
Here’s to growing your wealth,