Where to Invest Now: Texas

HERE’S a good case that the state of Texas has the best economy in the world. Its gross domestic product, which is over $2 trillion, is bigger than that of all but seven countries, and it’s growing like crazy.

- JAMES K. GLASSMAN

Since 2000, the population of Texas has risen 21.3%, more than any other state but tiny Idaho. Texas is the numberone exporting state, and it’s tops for foreign direct investment as well. It’s home to more Fortune 500 companies than California or New York, and for 19 years in a row a survey of CEOs by Chief Executive magazine has ranked Texas first in the nation based on assessments of business climate, workforce and quality of life.

Formula for success. Texas has five cities among the 12 largest in the U.S. (no other state has more than two), and I lived happily in one of them— Dallas—for four years. The success formula was obvious: a relatively low cost of living, a diligent and techsavvy workforce, and an accommodating regulatory climate with no individual or corporate income tax. No wonder, as the Census Bureau recently reported, 668,000 new residents relocated to Texas from out of state in 2022, with 102,000 of them coming from California.

Of course, not everyone likes the Texas way of life. You may not enjoy the climate or the devil-may-care zoning. The level of social services has been widely criticized, and U.S. News & World Report ranks the state’s education system for preschool through 12th grade 37th in the nation.

But you don’t have to live there to profit from Texas. On July 13, a Dallas bank launched the first exchangetraded fund that tracks an index of the state’s listed businesses.