Your Guide to Seasonal Living

Eagle Wealth Management |
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Weekly Market Commentary

 

Every year, millions of retirees flock to other climates in search of balmy weather and seasonal entertainment.  Regions like the coast or the Sun Belt welcome well over 50 million visitors between January and March, but they are just the tip of the iceberg when it comes to seasonal travel.  There’s even a colorful name for such intrepid visitors: “snowbirds.”

What’s a Snowbird?
Snowbirds are typically people who are retired or close to retirement and have decided to spend the winter months in a location other than where they usually live.  In the past, this term applied to those who traveled south in the winter to escape the cold.  Today, it can apply to retirees and others who travel seasonally to spend time outdoors and enjoy their favorite activities.1

Getting Started
In most things in life, it’s helpful to settle on a goal before you begin.  Start with the basics, such as deciding on your destination, length of stay, and, of course, budget.

Depending on where you decide to travel, renting on a seasonal basis can cost thousands over the length of your stay.  However, the funds you spend on renting could also be used to pay for some of the living expenses while you enjoy your second home.  Sure, buying a home is a significant commitment, but it also may open up rental opportunities and give you the freedom to visit your second home whenever you please.3,4

Sounds great, right?  However, before you begin searching for your perfect winter home, there are a few items to consider.  After all, wintering in more temperate locations can often mean more than enjoying the sunshine at your back and warm sand beneath your feet.

Owning a recreational vehicle (RV)
The allure of the open road and nearly limitless freedom appeal to many retirees looking to spend their winters elsewhere.  However, sometimes the reality of RV life can differ from your perceptions.  Here are some items to keep in mind before you start your journey:

  • Comfort behind the wheel – Depending on the size of your vehicle, you may need a commercial driver’s license (CDL), even if your RV is a non-commercial vehicle (which most are).  For recreational vehicles with a Gross Vehicle Weight Rating (GVWR) over 26,000 pounds, including a towed unit with a GVWR over 10,000 pounds, a CDL is required in the United States per federal and state law.
  • Try before you buy – If you aren’t sure which direction to go with the size and type of RV, rent a unit similar to what you are considering. You’ll soon know if life on the road is for you.

Owning a second home
If you prefer something more permanent, a second home may be right for you.  A second home can allow for longer trips and more opportunities for entertainment and socialization.  But as with any real estate purchase, there are some considerations to keep in mind.

  • Location, location, location (and price) – The ultimate price for your new home will depend heavily on the location you choose.  Even if you have experience in the real estate market, it can be helpful to enlist the aid of a real estate agent in your search.
  • Televised inspiration – If you’ve ever watched a real estate show, you’ve already started your search.  These shows aren’t just entertaining – they can also be invaluable learning tools.
  • Enlist a friend – Anyone who has shopped for a home knows how difficult it can be to remain objective.  Sometimes we see a home and love it so much that its shortcomings fall by the wayside.  Try asking an impartial friend to weigh in on your top choices.  It may be a little painful, but what they notice can save you from headaches in the future.6

Owning a rental property
Many of the considerations of second ownership apply here as well.  The significant differences arise when you decide to rent your property while you’re not using it.  After you’ve purchased your property, here are some potential ideas to help make it a success as a rental:

  • Management – A reputable property management company can be enormously helpful for private rental property owners.  For a fee, these companies will maintain the property, handle tenant issues, and make sure your investment is well-tended. 
  • Fractional ownership –Purchasing a rental property is a significant investment.  If you’re not quite ready to take the plunge, consider fractional ownership.  By splitting the investment among multiple owners, you may be able to manage the cost and potential risk of your rental property.

Research is a must – For this, the internet is your best friend.  Spend some time reading through message boards and posts from other rental property owners.  Often, you can find helpful, actionable tips or ways to avoid mistakes others have made during their searches.7

Whether you consider yourself a snowbird, a seasonal dweller, or just someone in pursuit of the good life, there are many ways to create a lifestyle that works like a dream.  You’ve worked hard to reach retirement.  Now it’s time to live a life you love.  If you’re considering seasonal living, let’s have a conversation.  We’re here for you as a resource.

Until next week,
Your Eagle Wealth Team


The Week on Wall Street

Stocks managed to gain ground last week as investors turned their focus to corporate earnings.

The Dow Jones Industrial Average rose 1.05%, while the Standard & Poor’s 500 gained 1.55%. The Nasdaq Composite index picked up 2.38% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, tacked on 2.73%.1,2,3

 

Earnings in Focus

At the start of the week, stocks extended the previous week’s rally with some high-growth companies leading the move higher. Strong company profits fueled the market the middle of the week, until an earnings disappointment from a mega-cap company took investors by surprise. The earnings miss deflated sentiment as it heightened worries of what it may portend for other technology companies yet to report. These anxieties led to a sell-off that reverberated across the market.

Subsequent earnings beats from several technology and social media names, and an above-consensus rise in new payrolls on Friday, helped the market close with week with a solid gain.

 
Omicron and Unemployment

A string of employment reports pointed to a generally healthy labor market, despite the Omicron surge late last year. The Job Openings and Turnover Survey (JOLTS) showed a hiring slowdown, with near-record high job openings and worker resignations. The ADP (Automated Data Processing) employment report saw private payrolls shrink by 301,000. That was the first monthly decline since December 2020.4,5

More encouragingly, initial jobless claims declined, while continuing jobless claims reached their lowest level since 1973. A strong January employment report showed 467,000 jobs added during the month, with upward revisions to previously released November and December.6,7

THE WEEK AHEAD

Key Economic Data

Thursday: Consumer Price Index (CPI). Jobless Claims.
Friday: Consumer Sentiment.

Source: Econoday, February 4, 2022
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.


Companies Reporting Earnings

Monday: Amgen, Inc. (AMGN).
Tuesday: Pfizer, Inc.(PFE), Chipotle Mexican Grill, Inc. (CMG), Sysco Corporation (SYY).
Wednesday:   CVS Health Corporation (CVS), The Walt Disney Company (DIS), Twilio, Inc. (TWLO), Yum Brands, Inc. (YUM), O’Reilly Automotive, Inc. (ORLY).
Thursday:  Twitter, Inc. (TWTR), The CocaCola Company (KO), Illumina, Inc. (ILMN), Duke Energy Corporation (DUK), PepsiCo, Inc. (PEP), Kellogg Company (K), Expedia Group, Inc. (EXPE).
Friday:  Dominion Energy, Inc. (D).

Source: Zacks, February 4, 2022
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.