5 Great REITs to Buy Now

It hasn’t been a good year for landlords. Publicly traded real estate investment trusts—which own income-producing real estate—have been clobbered in 2020, with the category overall losing 13.6%, compared with a 5.0% loss for the S&P 500 index. When the COVID-19 pandemic struck, whole sectors of the economy shuttered practically overnight, and millions of Americans lost their jobs. For REITs that owned apartment buildings, shopping malls, hotels or office buildings, collecting rent became a tall task, and investors took notice.

But the sell-off presents an opportunity for investors who buy REITs that stand to prosper in a post-pandemic world and avoid the ones that might falter. REITs with properties that require little human contact have bright long-term prospects, says Fidelity Real Estate fund manager Steve Buller. Trusts that own data centers, industrial warehouses for online retailers or cell-phone towers will benefit in a world that is shifting increasingly online, he says. Some of this optimism is priced into the stocks—tech-oriented REITs in the S&P 500 have returned 11% in 2020, on average. But that shouldn’t scare off long-term investors.

Buller sees value in select housing and office REITs that will regain steam as the economy reopens, but he says investors will face an uphill climb investing in trusts that own restaurants, child care facilities, gyms and senior living facilities. REITs that own retail properties, he says, may be permanently scarred, as buying preferences shift toward e-commerce.

The REITs below are poised to thrive. All yield less than the 4.6% average for REITs overall but sport impressive profit-growth prospects, healthy balance sheets and a history of raising payouts.

Note that instead of using traditional corporate earnings yardsticks to measure profitability, REITs use funds from operations, or FFO, which adjusts for depreciation and property sales. REIT distributions are taxed as ordinary income, which can sting high-net-worth investors who hold them in taxable accounts (prices and other data are as of June 12).

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Read more: https://www.kiplinger.com/investing/reits/600973/5-great-reits-to-buy-now

The Awkward Relationship Between Markets and the Economy

In March 2020, COVID-19 began to ravage the United States, putting the nation into lockdown and skyrocketing unemployment.

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Entering a bear market for the first time in 11 years, stocks plummeted by 30% on March 23, a substantial drop from its record in February. But while the stock market and the economy were both declining, troubles for the markets were short-lived. The 33-day bear market, spanning from Feb. 19 to March 23, soon rebounded. In fact, the S&P 500 soared 40% in the 50 days following its March 23 low.

Despite the presence of many indicators (e.g., rising unemployment, businesses closing left and right, etc.) that the economy is crumbling, stocks are staying relatively strong. There are a number of reasons this phenomenon can occur. The stock market and the economy have a fascinating relationship; the two are not one and the same.

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Unemployment levels shot up to 14.7% in April, the highest recorded since the Great Depression. The rise of unemployment, currently at 13.3% as of May, may be even more telling of the state of the economy: disaster around every corner. Yet, the stock market doesn’t seem to reflect that.

In fact, despite the (hopefully) temporary shocks to our economy, the stock market is going strong.

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Why? One reason is that a common assumption about unemployment is it tends to be temporary, lasting no longer than half a year in the most extreme cases. This assumption is so common that it's built into the very fabric of the unemployment system in the United States: The maximum length of unemployment benefits is 26 weeks, or 39 with the passage of the CARES Act of 2020.

That means — according to the assumption — that there's likely little cause for worry, because many of the recently unemployed will soon find re-employment when the government reopens states for business.

Another promising indicator of the current state of affairs is the U.S. gross domestic product (GDP). According to the Bureau of Economic Analysis (BEA), only about 10% of the GDP comprises industries at high risk for COVID-related losses. Therefore, catastrophic economic collapse from financial loss alone is

Read more: https://www.kiplinger.com/investing/601015/the-awkward-relationship-between-markets-and-the-economy

HSAs Get Even Better

As the country dealt with the fallout from the coronavirus pandemic this spring, lawmakers and regulators scrambled to ease the pain of record job losses and other blows to Americans’ pocketbooks and health. One result that has largely flown under the radar: Health savings accounts and flexible spending accounts, which offer a tax-advantaged way to save money for certain medical or dependent-care expenses, have become more generous. Some of the changes are temporary, but others have no expiration.

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More expenses are covered. Thanks to the Coronavirus Aid, Relief and Economic Security (CARES) Act, you can use money from an HSA or a health care FSA to pay more expenses—and these changes are permanent. Over-the-counter drugs purchased January 1, 2020, or later are now HSA- and FSA-eligible without a prescription. Those include pain relievers, cough suppressants, anti­histamines and other drugs that treat issues from heartburn to acne, says Shobin Uralil, cofounder and chief operating officer of Lively, an HSA provider. Feminine-hygiene products such as tampons, pads and menstrual cups are also qualifying expenses under the law.

Other new rules give a high-deductible health plan paired with an HSA the green light to cover certain expenses you incur as a result of the pandemic before you meet your deductible. One such
expense is telehealth, through which patients and clinicians consult remotely over the phone or by using a video chat tool, such as FaceTime. Telehealth services have been on the rise now that social distancing is encouraged — and high-deductible plans with plan years that start on or before December 31, 2021, are permitted to cover the services even if you haven’t reached your deductible. High-deductible plans may also pay for testing and treatment related to COVID-19 before you’ve reached your deductible. If a corona­virus vaccine becomes available, receiving one would be considered preventive care and may be excluded from your deductible, too.

A health savings account is a powerful tool to cover out-of-pocket medical expenses: Contributions are pretax (or tax-deductible, if your HSA is not employer-sponsored), the funds grow tax-deferred in the account, and withdrawals are tax-free for qualified medical ex

Read more: https://www.kiplinger.com/personal-finance/insurance/health-insurance/health-savings-accounts/600963/hsas-get-even-better

Nursing in the Time of COVID

Leah Gordon, 43, lives in Hugo, Minn., and directs the nurse anesthetist program at St. Mary's University of Minnesota. Kiplinger's talked to her about the challenges created by COVID 19 for nurse anesthetists and the problem student nurses--and the health care industry—are facing because they can't complete their bedside clinicals.

What does a nurse anesthetist do? When you heard about patients with COVID getting breathing tubes, it was primarily nurse anesthetists manning those intensive care units, placing the lines to give the medications and putting the breathing tubes between the vocal cords into their lungs.

How has the pandemic affected your job? My full-time job is as a professor and the nurse anesthetist program director at St. Mary’s University of Minnesota. I did work one day a week at an outpatient gastro­enterology center. In order to be a really good instructor, it’s important to keep my skills fresh.

Your side gig is on hold? When COVID hit, the first thing our governor did was suspend elective surgeries. Plus, they wanted all the personal protective equipment brought to a central location. That meant we couldn’t do any cases because we couldn’t use our gowns, we couldn’t use our shields and we couldn’t use our masks.

You must have taken a financial hit. A nurse anesthetist out of school right now is earning $180,000 to $190,000. I feel like a jerk even talking about it because I’m very, very fortunate, but when you lose that side hustle, all of a sudden $50,000 is gone. I earn too much as a professor to qualify for unemployment. But I have a $1,900-a-month student loan payment, and to not have my side job right now is challenging—and I’m not sure if I’m going to get it back.

What about the rest of your family? My partner is a registered nurse who works for the same surgery center—that’s how we met. He was furloughed for a few months, but now he’s back at work.

Will your students be able to graduate? We’re still figuring it out. Right now, most classes are online, and it’s really hard to learn a medical specialty at your house. You have to be able to do lab work and learn skills with your instructor side by side with you. We don’t really hav

Read more: https://www.kiplinger.com/personal-finance/careers/600974/nursing-in-the-time-of-covid-19

Stock Market Today: Double Dose of Jobs Data Drives Stocks Higher

A pair of encouraging jobs reports helped the major indices close in the black Thursday, and drove the Nasdaq Composite to yet another record-high finish.

Early Thursday, the Labor Department reported that the U.S. added 4.8 million jobs in June to easily surpass economists' consensus expectations for 3.7 million, while the unemployment rate dropped from 13.3% to 11.1%. Meanwhile, last week's jobless claims trickled lower to 1.34 million, from 1.38 million a week prior.

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"It is difficult to downplay the incoming June employment numbers, with both surveys showing sizable flows of workers returning to employment last month as states continued to remove restrictions on non-essential activity following the COVID-19 lockdowns in March and April," Barclays analysts wrote in a Thursday note.

"One thing that we are certain about," writes Rick Rieder, BlackRock's Chief Investment Officer of Global Fixed Income, "and is most relevant to markets, is that virtually all the numbers this month have displayed some tangible improvement, some clear reopening of the economy, albeit still very uneven by sector and region.

"We are confident that the industries that can be effective in a work-from-home framework and/or those that are deemed essential, such as healthcare or education, are showing tangible signs of improvement and employment durability. However, it is also clear that leisure, travel, energy, etc., are very uncertain in their path forward today."

Dow component Pfizer (PFE, +2.3%) enjoyed follow-through buying after Wednesday's encouraging COVID-19 vaccine news, and Walgreens (WBA, +2.7%) headed higher, too, helping the industrial average gain 0.4% to 25,827.

The Nasdaq climbed 0.5% to a new closing high of 10,207 on the back of a strong day for Google parent Alphabet (GOOGL, +1.9%). The S&P 500 finished with a 0.5% improvement to 3,130, and the small-cap Russell 2000 advanced 0.3% to 1,431.

And a reminder: The market will be closed tomorrow, July 3, in observance of Independence Day.

However, As Stocks Go Up, Yields Come Down

The market's torrid three-month rebound off the March bottom has been a much-needed relief for investor portfolios. Bu

Read more: https://www.kiplinger.com/investing/stocks/601014/stock-market-today-070220-jobs-data-stocks-higher

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