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About The Bulletin. (Bend, OR) 1963-current | View Entire Issue (June 13, 2021)
C8 The BulleTin • Sunday, June 13, 2021 Airport Solve these puzzles on C4 Continued from C1 Reumann said he was plan- ning to make a trip to Bor- deaux in August but canceled his plans due to the uncer- tainty of travel. France may be opening up, he said, but that doesn’t mean life is back to normal. He worries that the on-again, off-again lockdowns could cause business closures during his trip. That morning coffee and croissant at the cor- ner bakery in Bordeaux might not happen if all the bakeries in town are closed, he said. “So we will reschedule that for next year.” One advantage of foreign travel, said Reumann, is that flights are still mostly empty. That could mean more com- fortable travel compared to crowded domestic flights. “But if you go over, you may have to quarantine and have proof of tests and vaccinations, and a lot of people don’t want to deal with that,” he said. Those who do start their air journey from Redmond will encounter some improve- ments at the airport. A 500- spot parking lot costing $3.5 million was recently com- pleted. The third TSA line was also installed to speed up pas- senger lines through security checkpoints. The 45,000-square-foot operations building was con- structed at a cost of $14 mil- lion; it houses heavy equip- ment like snowplows and snowbrooms (trucks that “sweep” the runway). While snow and ice removal takes up a lot of time in winter, the summers are spent doing pavement maintenance and painting. Valentine Continued from C1 The first is the dividend yield — the amount of div- idends you get per dollar of stock price invested. Histori- cally the average yield in the U.S. has been about 4.5%. To- day, dividend yields in the U.S. are closer to 1.2%. Yikes. The second component that’s contributed to the 10% historical return is inflation. In the long run, it’s come in at about 3% annually. For the past few decades, inflation has been below that, but there are indications that it is picking up pace right now and how much (or how little) inflation the next decade reveals will have a big impact on stock re- turns. The third component to stock returns is the real growth of earnings. Over the long haul, that rate has been about 1.5%. Companies have grown profits by that rate, net of inflation. How well compa- nies do going forward is im- possible to guess. Optimists will peg that growth number north of 1.5% due to advance- ments in productivity on the back of extraordinary benefits of technology. That’s plausible. Finally, about 1% of the 10% annual average stock return owes itself to the increase in SOLUTION TO TODAY’S SUDOKU SOLUTION TO TODAY’S JUMBLE NYT CROSSWORD SOLUTION Dean Guernsey/The Bulletin Travelers line up at the Alaska Airlines ticket counter in the Redmond Municipal Airport on Tuesday. “It never slows down for us; there is always something de- pending on the season,” said Mike Wilcox, operations su- pervisor at the facility. Bass also upgraded the air- port’s HVAC system. It now includes a new UV lighting that purifies the air flowing through the vents. All up, the airport spent $25 million on upgrades during the pandemic. Funds to pay for the up- grades came with consider- able help from federal assis- tance packages, including the CARES Act. The airport re- ceived $12 million in funding and is expecting to receive an- other $6 million, said Bass. There were some hiccups, though. Construction of a $10 million “quick turnaround” car rental facility was put on hold during the pandemic. That could get going again in the summer of 2022, said Bass. The facility will include car washing, detailing and a fuel- ling depot. As Redmond Airport moves past the pandemic, it will be building on what had been unprecedented growth. The airport is now the 115th larg- est commercial airport in the country. Passenger numbers dou- bled over the five years be- fore the pandemic hit, from 500,000 each year to one million. That volume puts Redmond in the “small hub” category designated by the Federal Aviation Administra- tion. It previously was labeled a “primary non-hub.” Other “small hub” airports include Palm Springs, California, Eu- gene and Spokane, Washing- ton. More passengers mean more destinations. The newest non- the valuation of the market — the aforementioned P/E. Given how high valuations are already, it’s hard to see the multiple continue to expand. Looking forward in the U.S., your estimate for stock returns then is sum of your estimates of the four components. If we think dividend yields aren’t going to change much (1.2%) and we assume higher, but normal, inflation (3%) and we add that to solid earnings growth (2%) and no change in valuation, that assumes the go-forward return in the U.S. is about 6% per year. So what’s the takeaway? To eke out results above that 6% will require the broad- est opportunity set possible. Thus, we have to look over- seas. However, this does not mean abandoning invest- ments domestically. In our view, the decade ahead should be decent for most markets, and the U.S. market will likely continue to be a leader. Diversifying glob- ally will be the added key to extracting the best the markets have to offer investors. stop daily flights will be to San Jose, California, starting in September on Alaska Airlines. San Jose is Redmond’s 12th destination. September will also see the return of nonstop flights to Las Vegas on Allegiant Airlines. Chicago, a seasonal flight with United, is expected to return in the summer of 2022. Bass said he is also working with American Airlines to start a new nonstop flight to Dallas, expected in the spring of 2022. After Dallas, Bass said Minne- apolis could be the next non- stop destination. The East Coast and Hawaii could also be future destina- tions, but Redmond would first need to extend its runway, said Bass. “It’s on our plan for the next 10 years,” he said. e Reporter: 541-617-7818, mkohn@bendbulletin.com e William Valentine, CFA, is the co-chief Investment Officer of ASI Wealth Management of Bend. He and his wife, Jessica, have lived in Bend since 2000, where they raised their four sons. LAT CROSSWORD SOLUTION