Finance
Despite political promises, Californians are stressed about their finances
SACRAMENTO — After voters in November sent a clear message that the rising cost of living remained a top concern, California lawmakers came to the Capitol vowing to take decisive action.
“Our task this session is urgent and clear,” Assembly Speaker Robert Rivas (D-Hollister) told lawmakers at the start of the 2024-2025 legislative session in early December. “We must chart a new path forward. And it begins by focusing on affordability.”
Despite proposed legislation to help make California a more affordable place to live, however, voters in the state are growing increasingly pessimistic about their financial future, according to a new poll from the UC Berkeley Institute of Governmental Studies, co-sponsored by The Times. Nearly half of California voters feel worse off than they were last year, and 54% felt less hopeful about their economic well-being.
When asked to name the most important issues for state leaders to be addressing this year, the cost of living, housing affordability and homelessness topped the list — far above concerns about crime and public safety, taxes and immigration, the poll found.
“The number one issue is an economic issue. It’s the cost of living,” Mark DiCamillo, director of the IGS poll, said. “Both Democrats are and Republicans are in agreement on that one.”
Californians’ fears about their future, and their current financial well-being, dramatically increased after President Trump moved back into the White House in January, DiCamillo said. Within months, Trump announced sweeping new tariffs on goods imported from countries worldwide, sending turbulence through the global economy, and his administration began slashing federal agencies and programs.
The shift among voters was driven largely by partisan allegiance, and in California Democratic voters outnumber Republicans by a nearly two-to-one margin.
In August, before Trump’s election, 46% of Democratic voters in the state were upbeat about their financial well-being. In April, just 9% of them felt that way, according to the poll. Optimism also dropped among voters declared as “no party preference,” but to a much lesser degree. Among Republicans, just 9% were hopeful before Trump’s election, and that leaped to 57% in April.
“I’ve never seen this before,” DiCamillo said. “I’ve been polling for over 40 years in California and the last five years or so, everything seems to turn on party. If you ask people, ‘Is it sunny outside?’ the Democrats will say one thing, the Republicans will say [another]. It’s just unbelievable.”
In Sacramento, the Democratic-led Legislature and Gov. Gavin Newsom know that addressing California’s high cost of living is imperative, and that not doing enough to address voter concerns may have consequences. But any hopes of quick financial relief have been lost to the slow, deliberative political process of lawmaking in the Capitol.
Democrats have introduced a raft of new bills to save Californians billions in utility costs, limit extra fees for renters and cut red tape for building permits, among other measures, to target the growing financial burdens plaguing residents.
But the pending bills are not expected to make a dramatic shift in California’s longstanding economic problems that voters care most about, such as the housing affordability crisis, homelessness and the general cost of living.
Assembly Republican leader James Gallagher of Yuba City said the financial struggles of many Californians is the result of years of misguided, liberal leadership, and dismisses the Democrats’ latest push in Sacramento to repair that damage as too little, too late.
“My read of most of those bills is they don’t do a whole lot,” Gallagher told The Times. Most of them tackle fringe issues, he said, instead of getting at the meat of the problem. “In order to actually do something about affordability, [the Democrats] have to go back on their previous ideas.”
Trump’s victory in November was credited, in part, to his campaign promises to address the high prices and economic uncertainties confronting many Americans. The economic upheaval over the past five years is a major reason for the pessimism many feel today.
Fiscal policy meant to keep household budgets afloat during COVID-19 lockdowns caused higher inflation and drove up prices faster than usual, said Jerry Nickelsburg, faculty director at the UCLA Anderson Forecast. Since 2020, inflation rates have fallen, but voters notice the steep increase in everyday expenses, like gas and groceries.
Growth in worker pay during that time has not kept pace. Food, beverage and energy prices increased by 28% compared to before the COVID-19 pandemic, said Sarah Bohn, vice president of the Public Policy Institute of California (PPIC).
“We feel these at the pump, in utility bills, and at the grocery store,” Bohn said before an Assembly committee in late March. Inflation cut a 26% rise in wages down to net 2.9% since January 2020, she said.
“To me, those are all the facts we need to understand why Californians are frustrated financially. Earning 26% higher wages but feeling like you’re treading water at the end of the day? That is very frustrating,” Bohn said.
California is one of the most expensive states in the U.S. to buy or rent a home — the crisis has worsened in the last decade with rising housing costs and rent increases, and some policies like the California Environmental Quality Act, or CEQA, have been used to stifle new development since the 1970s.
Rent in California is 50% higher than the national median, according to U.S. Census data. One in six middle-class renters in California are now spending over half their income on housing, according to the PPIC, a nonprofit research center.
For years, Democrats have tried to carve out loopholes in existing laws and promote new developments to address the housing shortage. High prices have contributed to homelessness and the growing trend of Californians leaving for cheaper, not greener, pastures in neighboring states, according to recent PPIC analysis.
“California has really strangled itself by making it so hard over the years to build enough housing,” Sen. Scott Wiener (D-San Francisco) told The Times.
This session, Wiener introduced Senate Bill 677 — which failed in the Senate Housing Committee earlier this month — which could have expanded SB 9, a “duplex bill” from 2021 that allowed people to split their single family lot into two lots, and build up to three additional units on the property. The committee did advance another of Wiener’s bills, SB 79, which proposes allowing homes between four and seven stories to be built near major transit stops.
SB 681, part of the Senate Democratic Caucus’ affordability package and introduced by Sen. Aisha Wahab (D-Hayward), proposes several measures that address the housing crisis: quadrupling the renter’s tax credit for the first time in decades, cutting out additional fees renters pay for owning pets and other junk fees not listed in a rental agreement, addressing zombie mortgages — home loans appearing years, sometimes decades later after the debtor believes the loan has been forgiven — capping homeowner association fines at $100 and making the Permit Streamlining Act and Housing Crisis Act permanent.
Other legislation backed by the Democratic leadership would streamline applications for new housing developments, ban extra fees on rental payments and expand affordable housing for farmworkers.
SB 254 from Sen. Josh Becker (D-Menlo Park), chair of the Senate Committee on Energy, Utilities and Communications, is “the Legislature’s most ambitious effort yet to rein in rising energy costs and put ratepayers first,” he told members of the committee last week. The bill, in part, forces the California Public Utilities Commission to provide a public statement justifying any approved rate hike, and also require investor-owned utilities to finance $15 billion for wildfire mitigation and connecting customers to the grid.
The legislation is opposed by San Diego Gas and Electric, among others, who said it doesn’t address the underlying issues causing rates to go up and could be unconstitutional.
California Republicans offered their own solutions to affordability issues, including a bill from Gallagher that would have forced the Public Utilities Commission to cut electricity rates by 30% and AB 1443 sponsored by Assemblymember Leticia Castillo (R-Home Gardens) that would make earned tips tax-exempt. California Republicans also had a bill that expanded upon the renter’s tax credit, similar to the measure in Wahab’s SB 681.
Gallagher criticized the new Assembly committees created to focus on housing, child care, food assistance for those in need and reviewing the state’s push for low-carbon and renewable alternatives, arguing that discussing the issues rather than taking quick action was tone-deaf.
“Californians don’t need more government committees, they need real action that cuts their costs. Legislative Democrats have spent decades making our state unaffordable,” Gallagher said. “The faces change, but the party and the broken ideas stay the same — blocking housing, raising taxes, and driving up costs for working families.”
Times staff writer Phil Willon contributed to this report.
Graham is a senior consultant in the global special situations & private credit practice, based in the Hong Kong office. Dually qualified in England & Wales and Hong Kong, Graham focuses on both finance and restructuring matters across the Asia-Pacific region. He represents private credit funds, private equity sponsors, major institutional lenders and asset managers on a wide range of finance transactions, including cross-border leveraged financings, restructurings, special situations, direct lending, margin loans, real estate finance and corporate facilities.
Prior to joining Akin, Graham worked at leading international law firms in Hong Kong and London where he also undertook a secondment to Barclays Capital.
Because the EFL’s profit and sustainability rules are about trying to make sure clubs are not losing unsustainable amounts of money.
Despite going on a summer spending spree, paying about £30m for players and having one of the highest net spends around, Wrexham are well within the financial parameters because of the commercial revenue already being brought in thanks to deals with giants such as United Airlines and HP.
In League Two, they were already bringing in more than 20 of the 24 Championship clubs.
“Under the PSR rules, you’re allowed to lose £39m over three years,” said Maguire. “Looking at their two most recent sets of accounts, Wrexham lost around about £23m – but they’ve had substantial increases in broadcast revenue, from about £1.2m in TV money in League Two to about £12m this season.”
That is before taking into account a significant jump in sponsorship and commercial income, with chief executive Michael Williamson estimating they are already on a par with some top-flight clubs.
“We have a global brand, a Premier League brand in the Championship,” Williamson told Ben Foster’s Fozcast podcast in August 2025.
“What we don’t have is the broadcast revenue of Premier League clubs or the parachute payments.
“From a commercial standpoint, if you compared us to Championship clubs, I’m sure we’d be among the top and – on commercial revenues only – we would probably surpass a handful of Premier League clubs, around four or five I would guess.”
As you work on diversifying your stock portfolio, it can be a good idea to take a step back and consider your options. What sectors are advantageous now? Should a new approach be taken?
We spoke with 12 financial and investing experts who shared the stocks that have currently piqued their interest. And, they shared their best advice on how to approach your picks. If you’re looking for sound advice this year, and beyond, you can find advisers using CFP Board, NAPFA or this free tool from our ad partner SmartAsset that matches you to fiduciary advisers.
CrowdStrike or the ETF Global X Cybersecurity — Myles J. McHale Jr., president and founder of Wealthcare Advisors
“Many of us have faced credit card fraud or financial/romance scams, and these issues are not going away. I recommend investing in network security, endpoint protection and identity management. Specifically, the individual stock CrowdStrike (CRWD) or the ETF Global X Cybersecurity ETF (BUG) are excellent choices in this space. With the continued expansion of AI, cybersecurity investments will remain crucial,” McHale says, while adding that “there is no need to panic or drastically change your current asset allocation.”
BBB Foods — Rick Munarriz, stock analyst at Motley Fool
“Valuations and tensions are high, so if there were ever a time to be a Peter Lynch disciple and ‘buy what you know,’ this would be it. Don’t chase hot stock tips in companies and industries you don’t fully understand or aren’t passionate about. One of my favorite stocks heading into 2026 is BBB Foods (NYSE: TBBB). It’s the parent company of Tiendas 3B, a fast-growing retail chain in Mexico specializing in ‘hard discount’ groceries.
It’s a stacker, and by that I mean a company that is stacking growth on top of growth. BBB Foods is expanding its chain at a low double-digit percentage rate. It’s also growing average store-level sales — or what they call comparable-store sales — in the low double digits. Stack those two things together consistently, and BBB Foods has rattled off four consecutive years of better-than-30% revenue growth.”
BlackRock, GE Aerospace and Walmart — Jason Bernat, investment adviser, president and CEO of American Financial Services
“We are anticipating several rate cuts in 2026 which will support higher valuations but also increased volatility. I personally believe that AI will continue to remain central. Stocks tied to AI computing and data center buildouts are obvious choices. However, moving beyond pure hype tech, into sectors like financials, industrials, and even value, will give a major growth opportunity.
NVIDIA (NVDA), Broadcom (AVGO), Marvel (MRVL), Taiwan Semiconductor (TSM), Alphabet (GOOGL) [and] Amazon (AMZN) are your champion AI stocks with high earning potentials, momentum, and cloud and hardware growth expectancy. Outside those, I like BlackRock (BLK), which has strong earnings growth. GE Aerospace (GE) industrial and defense exposure with projected revenue growth. Finally with a more defensive position if markets wobble is Walmart (WMT).”
“Focus on owning high-quality, cash-flow-generative assets” — Josh Katz, CPA and founder of Universal Tax Professionals
“The easy-money era, where simply being in the market guaranteed strong returns, has shifted. This year, focus on owning high-quality, cash-flow-generative assets and let that income, reinvested over time, do the heavy lifting for your portfolio. Patience and discipline will be key differentiators.
I always favor diversified exposure through ETFs that capture the themes above rather than risky individual stock picks. The U.S. equity market is projected for resilient growth, with firms poised to benefit from AI-driven efficiency gains, a friendly policy mix and strong earnings potential. This remains the core, growth-oriented foundation of a portfolio. In a market favoring quality and durable cash flow, funds focused on companies with a history of growing their dividends are essential.”
Renewable energy and energy storage — Jamie Hobkirk, CFP at Reynders McVeigh Capital Management
“As we move into 2026, I think it is important for investors to stay diversified across different sectors and not get hung up on the winners of 2025. More recently, we are starting to see increased breadth in the market, which presents more investment opportunities for investors.
Themes that Reynders McVeigh continues to like are renewable energy, energy storage and the buildout of the electric grid. The expansion of artificial intelligence is creating a growing demand for energy. With current demand outpacing production, multiple energy sources will be needed to support continued growth. Companies that support these themes are Schneider Electric, Nexans, and Nextpower Inc. to name a few.”
AI and tech — Carson K. Odom, CPA, CFP and wealth adviser at Adams Wealth Partners
“AI and technology leadership remain central to the conversation, but concentration is the biggest risk factor here. My biggest warning would be to make sure investors are aware of how concentrated an index fund they own may be. Some may not realize that 40% of their index fund is concentrated in under 10 names.
Themes I like for 2026 are tech and AI infrastructure, quality earnings and underperforming small-cap stocks. AI got the headlines in 2025, and I think the infrastructure behind it can take the lead in 2026. Also, high quality small-cap stocks have really lagged in performance since 2021. We’re nearing one of the largest deficits in small cap performance relative to large caps in recent history. If history tends to give us a lesson, it’s that there’s usually a reversion to the mean with these trends, which makes small caps appear attractive.”
Walmart and American Express — Ekenna Anya-Gafu, CFP, accredited asset management specialist, AIF and founder of Pacific Canyon Investments
“My number one piece of advice is have a long-term thesis and try to ignore the noise (a lot easier said than done). My biggest thought when it comes to the stock market and retail clients is that understanding the source of products, where they are made, and who the company is selling to is extremely important.” Anya-Gafu recommends:
“Walmart (WMT): They have close to a monopoly on low-income shoppers, and if the K curve (different groups in the economy experience very different outcomes at the same time) shows more in 2026, I believe the middle class will start to fade, which puts more individuals and households into lower income thresholds.
American Express (AXP): We saw that 93% of all purchases on Black Friday [were] done on a credit card or Buy Now Pay Later (BNPL). I like American Express because their high credit profile requirements will be more protected from people not being able to pay their credit card bills, but because it is a charge card, it should make more profit than a typical credit card company.”
Digital infrastructure and essential services — Martin Robinson, CFP and director at Amzonite
“Areas such as digital infrastructure, the energy transition and essential services continue to attract attention because they tend to be more resilient across different market conditions. Companies with steady cash flows, pricing power and strong ownership are often better positioned when uncertainty is high. Ultimately, stock choices should reflect personal goals, time horizon and comfort with risk, rather than a single prediction about where the market is headed.”
MYR Group, First Solar and Recursion Pharmaceuticals — Peter Krull, director of sustainable investing at Earth Equity Advisors recommends:
“MYR Group (MYRG) — Specialists in electrical infrastructure. Between the clean energy transition and the AI buildout, we’re going to need to move electrons efficiently across the country. MYR designs and builds transmission lines to meet the ever-growing demand for more electricity. I see continued growth for at least the next decade in their services.
Recursion Pharmaceuticals (RXRX) — One of the most promising uses of AI technology is in biotechnology and pharmaceutical development. Recursion teamed up with NVIDIA to build a supercomputer to analyze potential drug opportunities. The analysis performed by the Recursion system has the potential to speed up the drug development process and reduce the cost of development by half. This is a riskier opportunity, but there should be long-term potential.
First Solar (FSLR) — First Solar is a leading designer and manufacturer of solar panels and systems for utility-scale developments, and the largest headquartered in the U.S. They are focused on innovation in the solar manufacturing space, investing in clean manufacturing and higher cell efficiency.”
Healthcare, energy and housing — Chris McMahon, president and CEO at Aquinas Wealth Advisors LLC
“We believe the market will broaden out dramatically over the next few years. The current overconcentration in tech stocks will begin to spread into the broader market. In particular, we think sectors such as construction, banking, and materials are well positioned for growth.” McMahon recommends:
“Healthcare: this sector has languished as the market reduced allocation based on the uncertainty of Secretary Kennedy. We have had time to see that in spite of some changes.
Energy: driven by the demand from AI and also a return to U.S. manufacturing we expect energy to outperform in the coming year.
Housing/material: lower interest rates will drive spending and fuel the growth of this sector. [The] $3-6 million shortage of housing is real and means good things for the sector.”
Commodities — Michael E. Chadwick, CFP and founder at Fiscal Wisdom Wealth Management
“The public needs to understand capital is slowing [and] rotating away from stocks to hard assets. While the world chases seven stocks and crypto, the next cycle will favor hard assets and the most richly valued things today will take the biggest bath. Index funds, popular mutual funds, ETFs that are passive, and lifestyle funds are the most dangerous things to own today and will likely see massive falls followed by upswings.
I like the commodity complex in general — precious metals No. 1, miners No. 2, critical metals No. 3, energy No. 4, [hard commodities like energy, gold and silver] and Latin America is also very attractive. I like them because they’re out of favor, undervalued and have been ignored. The whole world is chasing AI, tech and crypto, so some amazing opportunities exist in boring areas. This is where the real money will be made in the next cycle.”
Utilities and industrials — Doug Beath, global equity strategist at the Wells Fargo Investment Institute
“We continue to be very positive on the AI buildout and believe we’re closer to the early innings of the cycle than the end, but are also cognizant of valuations. We downgraded the technology sector to neutral several months ago and now favor the ancillary trends related to AI but with better valuations such as utilities with the data centers, and industrials to help build out those data centers.
Financials also have a favorable AI-related theme in terms of financing and M&A activity — and seem particularly oversold so far in 2026. At some point, we could overweight technology again if there’s a pullback or market conditions changed. This leads to another theme we’re recommending to clients this year, and that is prepare to ‘be nimble.’”
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