It’s 2025!

Happy New Year, and welcome to 2025!

We hope you and your family had an enjoyable holiday season. We thank you for allowing us to help you pursue your financial goals. We are excited to see what the new year will bring.

The year 2024 was filled with many significant events, but overall, it proved to be a good year for investors. Both interest and inflation rates started to fall, and while recession worries persisted, investors still enjoyed strong positive returns as major indexes reached multiple new highs. Notably, the year ended on a high note in December as the Federal Reserve decided to reduce interest rates for the third consecutive time. They also indicated that further interest rate cuts could occur in 2025. While equities have advanced, 2025 brings a new administration, and historically, changes can make for an interesting year.

As we enter the new year, we will continue to stand by our commitment to supporting you on your journey toward your financial goals. We believe that a proactive approach that anticipates the needs of our clients is optimal. To assist you with this, we have included a checklist for 2025 that can help you identify key items to discuss with us over the coming year.

Looking Ahead to 2025

While there are many aspects to overall financial planning, the following are some specific topics we will continue to watch carefully as we head into the new year.

• Interest Rates: Interest rate movements continue to be critical for investors. In 2024, the Federal Reserve began reducing interest rates with a long-term outlook of further reductions. For 2025, we will be watchful of interest rate movements and their effect on the economy and equity markets.
• Inflation: Inflationary concerns are important for investors. We saw a significant overall slowdown in inflation during 2024. However, there is still more to be done to reach the Fed’s 2% target range. We will continue to monitor inflation numbers as the 2025 data becomes available.
• Stock Market Valuations: Valuations are key predictors of equity returns. While we do not attempt to predict short-term valuations, we will continue to help you identify your risk tolerance and time horizons. We also understand that market volatility will continue to be a normal part of the investment experience, and we can help you use non-emotional behavior when making financial decisions.
• Your Personal Situation: Your situation is always our highest priority. We are here to help you with any financial moves or concerns throughout the year. We understand that each individual and household has different goals and needs. We will continue our tradition of keeping you informed of any changes that may affect your situation.

We enter 2025 cautiously optimistic. Having a solid foundation and strategy is critical to the outcome of your financial plans. Revisiting your plan to keep it current is a sound practice we feel should be conducted consistently. Our mission is to provide you with guidance and support on your journey toward your financial goals.

 

2025 Tax Law Potential Scenarios

In 2025, there will be much discussion about tax law changes. Currently, the tax rules are automatically scheduled to sunset and change for 2026. Here are three potential scenarios we could see this year.

Extending the 2017 Tax Laws The current tax cuts are set to expire after 2025. Lower rates, larger standard deductions, and lower business taxes could prove to be hard to justify fiscally. Therefore, lawmakers could simply extend the current tax code for a few more years.

Tweaking the 2017 Tax Laws During the presidential campaign, there was discussion about no tax on tips, possibly not taxing overtime, and revisiting State and Local Tax deduction amounts.  Lawmakers could possibly extend the 2017 laws with some modifications.

A Complete Tax Law Overhaul  Although it’s not likely, there is always the possibility that Congress revisits our entire tax system and makes fundamental changes to the existing system.

The views expressed are not necessarily the opinion of LPL Financial and should not be construed, directly or indirectly, as an offer to buy or sell securities mentioned herein. All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. This article is for informational purposes only. Economic forecasts set forth may not develop as predicted, and there can be no guarantee that strategies promoted will be successful. This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice as individual situations will vary. For specific advice about your situation, please consult with a lawyer or financial professional. Past performance is no guarantee of future results. This article provided by The Academy of Preferred Financial Advisors, Inc. © 2025

 

 

12667 Alcosta Blvd., Suite 355 | San Ramon, CA  94583  |  800.480.8740  |  info@tomrenwealth.com |  www.tomrenwealth.com

All Financial Advisors of Tomren Wealth Management are Registered Representatives with, and securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.