☀️ Summer 2025 financial news: WTF Happened, Personal Finance Edition

Sep 3

Keeping up with financial news this summer felt like trying to keep up with fashion cycles (I’m still unclear whether skinny jeans are in or out?)

I block time each morning to read my favorite financial and business publications and I can’t count the amount of times I found myself spending hours deep diving into another policy/personal finance rabbit hole.

The administration’s level of policy activity had a massive amount to do with it and the stock market itself was anything from boring. Markets kept breaking records (largely thanks to AI), Congress actually agreed on something (wild), tax rates were cemented with new tax rules implemented, and alternative assets are making their way into your 401(k).

Meanwhile inflation bounced around and unemployment crept up (even if the data didn’t say so at first).

Not to mention the economic impact of global politics, tariffs, and war.

I had a hard time keeping up and I love this stuff (which is why I decided to become an Accredited Financial Counselor® and teach personal finance for a living).

The good news is that you don’t have to stay on top of the news as closely as I do to be a smart investor. The best investors implement long term strategies, learn what matters, and stick with the basics that we know work…spending less than you make, investing consistently, diversifying your money across different types of investments, and not trying to time the market.

But I do want you to know what happened this summer. Because while the fundamentals of personal finance don’t change, the world around them does. And a few tweaks and updates can over time make a big difference between feeling overwhelmed and actually building wealth with confidence.

So here’s a summer recap of some of the personal finance news we got this summer, what it means in plain English, and what (if anything) you should actually do about it. While none of this necessarily means you have to uproot your current strategy, knowledge really is power and the more you understand, the harder it is for Wall Street, fees, or politicians to f with you.

As a reminder, none of this is financial advice. Just info I think you should know.

👉 If you want to learn the 3 need-to-know key steps to get started investing and build wealth in this bizarre economy (without the jargon or overwhelm), join my next free workshop here.

Part 1: The S&P 500 is getting really top-heavy in tech.

As a reminder, the S&P 500 is an index of the top 500 biggest U.S. companies, and it’s the most common index people invest in using index funds or ETF’s. It’s also what we often use to measure the performance of the overall stock market. When people say the market is doing X%, usually they mean the S&P 500.

So now, a handful of mega-tech names, nicknamed the Magnificent 7 stocks (think Apple, Microsoft, Nvidia, Amazon, Google, Meta) make up almost a third of the index. Translation? If you’re in an S&P 500 fund, you’re less diversified than you think. You’re betting a big chunk of your money on tech giants.

This doesn’t mean it’s a bad investment, it’s just less “eggs in different baskets” than you think and it leads to a tech-heavy stock market.

So how else can you achieve index fund diversification within the US stock market?

Look into a small-cap index fund (smaller U.S. companies).
Consider equal-weight S&P 500 funds where eveery company gets the same slice of the pie.

Many experts would consider these types of funds more risky because your betting more of your dollars on less established, smaller companies. The S&P 500 concentration doesn’t mean it’s a bad investment to own (I own it too)… but you should know what’s under the hood.

Part 2: Market at all-time highs…again…and again…

Your accounts probably look pretty nice right now if you’ve been invested but we have to remember that markets don’t move in straight lines forever. Stock market all-time highs are eventually followed by dips.

So what’s actually driving this? First, the AI boom…companies like Nvidia, Palantir, Microsoft, and Google are riding massive demand for AI pushing the whole market higher.

In addition, the perception of our current administration it is focused on deregulation which business loves (aka less rules = more money and higher earnings) and in general some corporate earnings have been stronger than expected, especially in tech.

Put it all together and you’ve got a market hitting new records but leaning really heavily on AI to get there.

Will it continue? Depends on who you ask. A lot of people are betting big on AI, but there are real questions about whether the infrastructure can keep up…think data centers, energy demands, and supply chains. On top of that, tariff impacts from ongoing trade tensions may not be fully priced in yet. Some analysts see more room to run, others are bracing for a pullback.

Takeaway: celebrate the record highs of 2025, but remember long-term investing works because you ride out both the highs and the lows and we are far from done talking about tariffs and the stock market.

Part 3: 401(k) Changes 2025 (Executive Order + Alt Assets)

This summer, Trump signed an executive order that could open the door for alternative assets in your 401k. This means that private equity and maybe even crypto could be available inside your 401k’s and create an opportunity for more 401K diversification.

For clarity, private equity is investing in businesses you can’t buy on the stock market. There’s less transparency, higher risk, less access to your money once you are invested but the potential for higher reward.

To date, these types of investments have been reserved for wealthy investors (what’s called accredited investors) and big pension funds. The pitch is that Americans are “missing out,” and this change would remove barriers to let regular people in.

People for it will argue more diversification and potentially bigger returns. Those not in favor will say that the. fees could be really high, your money could be less liquid and eat away at your retirement, not to mention the potential conflict of interest that private equity firms would love access to the $9 trillion sitting in 401(k)s.

At the end of the day there’s still a long way to go for the Department of Labor and SEC to determine how this could show up in your 401K and plan administrators could decide whether or not to include these type of investments. The impact could also be less than we think if these alternative investments are included as a small percentage of something like a target date fund that already has a good mix of stocks and bonds.

👉 Remember your 401K is an investing account and how you manage it, matters. If you want to learn more about stock marketing investing 101 don’t miss my next free investing workshop here.

🎥 Part 4: Crypto (Stablecoins + Why They Matter)

For the first time ever, Congress passed real crypto legislation AND it was actually supported by both sides of the aisle (shocker, I know). This legislation was called the Genuis Act and was focused on regulating something called stablecoins.

Let’s back up really quickly and do a quick Crypto 101 lesson to understand why this matters.

Cryptocurrency is basically digital money that isn’t issued by a government or controlled by a bank and all of it runs on something called blockchain technology, which you can think of as a giant digital notebook where every transaction is recorded across thousands of computers and it’s impossible to erase or change.

The first real-world application of this technology and the first major cryptocurrency most people know, is Bitcoin. It launched in 2009 as a way to send money peer-to-peer without banks.

Then came Ethereum, which took things a step further. Instead of just being digital money, Ethereum is like a programmable blockchain that lets developers build apps on top of it. Think of it less like “cash” and more like a foundation you can build apps on.

So where do stablecoins fit in? A stablecoin is basically a digital dollar. One coin = one dollar. Different from Bitcoin or Ethereum, which can swing up or down in value significantly and rapidly.

Stablecoins matter because they could make payments cheaper. Right now, every time you swipe your card, Visa and Mastercard take a cut, the POS system takes a cut, and then those costs usually get passed back to us. Stablecoins could basically cut out the middlemen, making payments faster and cheaper.

So what stablecoin legislation was actually passed in 2025? The Genius Act is intended to create the first federal framework to regulate Stablecoins by requiring issuers have reserves and protect consumers.

It’s still early and there is some regulation still missing but this is the beginning of a shift making crypto less speculative and more actually useful and of the most bipartisan bills we’ve seen in a while.

Part 5: Interest Rates (The Fed + What to Do)

The Father of the Fed, Jerome Powell, kept interest rates the same this summer to keep fighting inflation.

As a reminder, the Federal Reserve or “the Fed” is the main bank of America that sets U.S. interest rates and controls the money supply. The decisions made by the Fed impact us a lot because when the Fed raises or lowers rates, it ripples through the whole economy…think mortgages, credit cards, car loans, savings accounts, and even the stock market will react.

Despite mounting pressure from the Trump Administration, the Fed hasn’t moved rates down due to inflation and creeping unemployment but it’s possible that could all change this fall.

For now,

High-yield savings accounts are still paying 4–5%.
And mortgage rates are hanging out around 6–7%.

But with the job market cooling, rates could come down in September. That’s good for mortgages, not as good for HYSAs.

Reminder: savings accounts like HYSA are great for short-term cash (emergency fund, near-term goals) but so great for long-term wealth building especially since the stock market averages ~10% over time. Don’t let all your money just sit in savings because the rate looks good….there are better options if you really want to build wealth.

Part 6: Taxes (Big Beautiful Bill Updates)

The “Big Beautiful Bill” made some tweaks this summer. I didn’t think it was particular “beautiful” but it certainly was “big” but here are some things that were included in this BIG bill:

Tax rates stayed the same — no change to your brackets.
Tipped workers win — up to $25k in tips can be excluded from income taxes for certain jobs
Trump Accounts - tax-deferred savings for kids under 8…big TBD on how this will actually work
SNAP took a hit — Supplemental Nutrition Assistance Program that helps low income families buy groceries will get less funding and include stricter requirements
Overtime perks — extra pay for extra hours is treated more favorably.
Parents and seniors — some credits and deductions got a boost.
High-tax states — the SALT deduction cap was raised, so you can write off more of what you pay locally.

In addition this bill rolled back green energy initiatives, shoveling more funding into military, and ICE, and defunds planned parenthood (a personally very tough pill for me to swallow).

This bill was jampacked so if you want more info, here’s a full post on some of the major updates always, the type of account you use (401k, Roth, 529, etc.) makes a huge difference in how much you actually keep after taxes.

Part 7: How I Changed My Portfolio This Summer

Here are some things I actually did with my own money this summer. To be candid, the changes I made were relatively small as I already hold a very diversified portfolio but I hope these helps you think of things differently (as always…this is NOT financial advice.)

Added more international stocks — the U.S. isn’t the only game in town.
Boosted my small-cap index funds — smaller U.S. companies balance things out when the S&P 500 is so top heavy.
Added some equal-weight S&P 500 funds — spreads the risk more evenly instead of letting Nvidia, Apple, and Microsoft dominate.

Not saying you should copy me and this everyone’s situation is different. The bigger point is that when the market shifts it’s good to check your portfolio and ask, “Am I really as diversified as I think?”

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