December 16, 2025

IN THIS ISSUE: Big balances, links you loved, and help building wealth

GOOD START

These 14 heartfelt gift ideas are tax-savvy too.

THE HEADLINES

Strong bonds

What’s happening: Several US and global stock market indexes set records this year, but don’t overlook bonds as 2026 approaches.

Here’s why: Bonds are still offering relatively high yields compared to recent decades. That’s despite the Fed’s interest rate cuts this year, which typically send bond interest rates down. The Bloomberg US Aggregate Bond Index¹ showed returns of about 7% for the year as of December 15.² That’s roughly 14× more than 2015’s returns.³

What it means for you: Those relatively high starting yields could help offer a cushion in case of future interest rate volatility. Bonds could help provide portfolio diversification, regular income, tax efficiency, and capital preservation. Check out these 4 bond investing ideas for different kinds of needs.

• • •

Jingle bulls?

What’s happening: Investors are wondering if a Santa Claus rally—when the S&P 500^®4 rises during the final 5 trading days of the year and the first days of 2026—will show up this year.

Here’s why: It’s been a volatile month. Results of the jobs report and upcoming Consumer Price Index, plus AI stock uncertainty, could fuel uneasiness. On the other hand, end-of-year trading activities, like tax-loss harvesting and workers investing holiday bonuses, could make markets jolly.

What it means for you: It’s too early to say if Santa’s coming to town with gifts for investors, but don’t let any shakiness throw you off course. Expecting a bonus before the end of the year? Find out how it might be taxed and 5 ways you could make that money work harder.

• • •

Highs and mighty

What happened: Both 401(k) and 403(b) workplace retirement plan average balances reached record highs in 2025’s third quarter, according to Fidelity’s latest Building Financial Futures report.

Here’s why: Strong market gains coupled with high saving rates. Employees contributed an average of 9.5% of their pay, with employers pitching in an additional 4.7% for a total 14.2% saving rate.⁵ That’s another record and closes in on Fidelity’s suggested retirement saving rate of 15% which includes employee and employer contributions.

What it means for you: If your workplace matches contributions, try to save at least enough to get the full amount being offered. These micro-saving habits could help you reach that goal.

LINKS YOU LOVED IN 2025

HOW TO

Save for the future without much effort

You don’t need to be an expert stock picker or market-timing pro to create and maintain a sound investment plan.

Try 6 low-effort ideas

SEE YOU IN 2026

Smart Money editors are taking a holiday break. We hope you do too. Look out for our next newsletter with some money moves for 2026 on January 6.

NEXT STEPS TO CONSIDER

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1. The Bloomberg US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment-grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasurys, government-related and corporate securities, mortgage-backed securities (agency fixed-rate pass-throughs), asset-backed securities and collateralized mortgage-backed securities (agency and non-agency).

2. “Bloomberg US Agg Total Return Value Unhedged USD,” YTD return, Bloomberg.com, accessed on December 15, 2025.

3. “Historical performance of the Bloomberg US Aggregate Bond index,” 2015, Curvo.com.

4. The S&P 500^® Index is a market capitalization–weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent US equity performance.

5. “Q3 2025: Building Financial Futures,” Fidelity Investments, September 30, 2025.

Investing involves risk, including risk of loss.

Past performance is no guarantee of future results.

Diversification and asset allocation do not ensure a profit or guarantee against loss.

In general, the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk, and credit and default risks for both issuers and counterparties. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially affect investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.

The third parties mentioned herein and Fidelity Investments are independent entities and are not legally affiliated.

The Fidelity Investments and pyramid design logo is a registered service mark of FMR LLC. The third-party trademarks and service marks appearing herein are the property of their respective owners.

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