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IN THIS ISSUE: Bumps in the road, tax stats, and rate insights |
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THE HEADLINES
Jump aroundWhat’s happening: It’s been a bumpy start to 2025 for the stock market.
Here’s why: Last week’s jobs report was stronger than expected. That’s good news for the economy, but it made investors nervous about inflation and changed expectations for a Fed rate cut this month. Now market charts look a little roller coaster-like.
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| What it means for you:
Watching your investments go up and down could make you feel uneasy, but stay the course. It might be tempting to sell stocks to avoid additional drops, but it can be hard to catch up. Missing just a few of the best days in the market can cost you a lot. Plus, history shows that, overall, stocks have recovered from dips and delivered long-term gains. (Although, keep in mind that past performance is no guarantee of future results.) Navigate the market’s ups and downs with
these 6 tips. |
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Tax talkWhat’s happening: Tax changes could take center stage this year.
Here’s why: 39 states are making changes to their tax codes, including 9 (Indiana, Iowa, Louisiana, Mississippi, Missouri, Nebraska, New Mexico, North Carolina, and West Virginia) that cut individual income tax rates, according to the Tax Foundation.1 However, some states could increase other tax rates, like sales and property taxes, to make up for lost revenue. Another question mark is the fate of federal income taxes: The individual income tax cuts of the 2017 Tax Cuts and Jobs Act are set to expire at the end of this year unless Congress extends them.
What it means for you: Even if you don’t live in a state making changes to its income tax rates, you may still be able to trim your overall tax bill with these 11 deductions and credits. You also have until the tax-filing deadline of April 15 to make tax-deductible prior-year contributions to a
health savings account (HSA) or traditional IRA (if you’re eligible). That could reduce your taxable income—and your tax liability—for 2024. |
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ETFactsWhat’s happening: US exchange-traded funds (ETFs) reached a record $10.6 trillion in assets last year—a more than 30% increase over 2023, according to research firm ETFGI.2
Here’s why: Investors might appreciate that ETFs trade like stocks, can have low fees, and offer a potentially tax-efficient way to buy diversified investments. A record-breaking 2024 stock market likely boosted assets too.
What it means for you: Most brokerage accounts allow you to trade ETFs, and some retirement accounts, like IRAs, do too. Need some inspiration? Fidelity’s
ETF/ETP Screener could connect you to ETFs that may match what you’re looking for. Learn more about the potential benefits and other considerations of ETFs. |
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WORTH A TRY?The goal: Free up money for savings
The task: Call your service providers and negotiate lower rates.
First, research your provider’s (and their competitors’) promotions. Then, dial your company’s customer service line and ask if there’s a retention or loyalty department—they may have more deal-making power to keep you as a customer. Mention the discounts you found and ask the rep whether your current rate is the best they can do. Stay polite yet persistent to up your odds of a payoff.
Snagged some savings? Consider setting up an auto transfer for the amount into a savings or investment account. While you’re at it, get 10 ways to cut expenses by 10%. |
HELPING HANDOur thoughts are with everyone affected by the California wildfires. Here are steps to begin recovering financially from a natural disaster. Not directly impacted, but want to help? Get
Fidelity Charitable’s guidance. |
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YOUR FORTUNE’S FORTUNE
How does 2025 look for auto loans, credit card rates, and mortgages?The Fed could potentially cut interest rates later this year.3 Still, they’ll remain higher than we’ve seen in the past decade.4 Here’s how that could impact the cost of borrowing money.
Auto loans: Used and new car loans could drop slightly. The real issue for buyers will be inflated prices, which have been rising since 2020. If you have a good credit score, you might get a better rate.
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Credit cards: Interest rates could fall less than a percentage point, but that might amount to just a couple bucks saved on the first minimum payment on a $5,000 balance.5
If you have high-interest debt, here’s how you could pay it down this year.
Mortgage rates: While the Fed's key rate doesn’t directly impact mortgage rates (it’s more about supply/demand, inflation, and the 10-year Treasury yield), it can influence them. The 30-year fixed mortgage rate could drop this year from 7% to 6.5%.6 And buyers could have more negotiating power, since homes are staying on the market longer. Home equity lines of credit and home equity loan rates could also tick down.
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