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No room in Zoom boomtowns

Here are three of the week’s top pieces of financial insight, gathered from around the web:

Navigating the unemployment maze
Reddit has become an “unofficial hotline” for the nation’s jobless, said Ella Koeze at The New York Times. On the increasingly popular subreddit forum, r/Unemployment, “post after post conveys bureaucratic problems with endless variations,” from frustration with “jammed phone lines” and “glitch-prone online portals” to questions about “what to do if you make a mistake on your claim.” The majority of those answering are “other out-of-work people” who can empathize with the concerns, although there are some on the forum who do work for state unemployment offices. But 10 months into the pandemic, the volume of posting just keeps growing; last month, “the forum had one of its busiest weeks ever, driven by delays in payments and uncertainty around legislation signed late last year.”

No room in Zoom boomtowns
Home rental prices in Bozeman, Montana, have risen 58 percent in a year, said Patrick Sisson at Bloomberg, and locals are pretty sure they know the cause: “White-collar workers fleeing the pandemic-ravaged metropolis.” Remote work has upended real estate across the country, and not just in trendy tech hubs like Miami or Austin. “The median sale price for a Bozeman home clocks in around $700,000,” and similar housing spikes are being reported in other Montana cities like Billings and Missoula. Locals in many of these so-called Zoom boomtowns are “getting squeezed out” by out-of-towners. “The Bozeman boom has fueled an ‘incredible increase’ in the local homeless population,” according to a local nonprofit, “as well as a spate of pop-up RV communities for those who’ve been displaced.”

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Avoid investing in ETF fads
A study found that newly launched exchange-traded funds typically “lag behind the broad market’s returns over at least five years after launch,” said Mark Hulbert at The Wall Street Journal, and many don’t make it that long. In an analysis of all U.S. equity ETFs from 1993 to 2020, “specialized funds lagged behind the broad market’s return by an average of 5.4 percentage points on a risk-adjusted basis over the first five years of their lives.” To capture investors’ attention and attract assets, fund sponsors “tend to focus on increasingly specialized sectors and investment themes,” often to “capitalize on the latest trend.” Many end up “investing in overvalued stocks” already bid up to unsustainable levels “by the same fad that tempted the ETF sponsor to launch.”

This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.

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