Investing

GameStop announced Wednesday that company cash can now be used to buy equities instead of just short-term debt, and that Cohen is in charge of the investments.
Cohen became CEO in September after significant turnover among GameStop executives.
Shares of GameStop closed at $14.84 per share on Wednesday.

A GameStop store in a strip mall in Chicago on March 16, 2023.
Scott Olson | Getty Images

Struggling retailer GameStop is giving its CEO and chair Ryan Cohen even more control, including the ability to use company cash to buy other stocks.
In its quarterly report released Wednesday night, GameStop announced two changes to its corporate investment plan: company cash can now be used to buy equities instead of just short-term debt, and that Cohen is in charge of the investments.

“Mr. Cohen directs the investment activity of the Company in public and private markets pursuant to authority granted by the Board of Directors. Depending on certain market conditions and various risk factors, Mr. Cohen, in his personal capacity or through affiliated investment vehicles, may at times invest in the same companies in which the Company invests,” the filing said.
“Such investments align the interests of the Company with the interests of related parties because it places the personal resources of Mr. Cohen at risk in substantially the same manner as the Company in connection with investment decisions made on behalf of the Company,” the filing continued.
The company did not hold a quarterly conference call with Wall Street analysts, but Wedbush’s Michael Pachter called the decision “inane” and “alarming.”
“Investors have a myriad of investment vehicles available to them and therefore do not need GameStop to act as a mutual fund. If GameStop truly believes in the value of its shares, it should use its excess cash to buy back stock,” Pachter said in a note to clients.
The change comes as Cohen’s attempted turnaround at GameStop is floundering.

The company reported net sales of $1.08 billion for the quarter ending Oct. 28, down 9% year over year and off 25% since the same period in 2019. The company’s net loss did shrink year over year, but that was largely due to aggressive cost cuts, including closing stores in Europe.
Cohen, the co-founder of Chewy, bought shares in GameStop in 2020 and joined the board in 2021 as GameStop became one of the key stocks in the WallStreetBets meme trading phenomenon. Cohen’s e-commerce experience fueled hopes that he could help modernize the brick-and-mortar video game retailer.
But the company never released a detailed turnaround plan and has churned through executives. GameStop fired CEO Matthew Furlong in June, and the company’s chief financial officer resigned shortly thereafter. Cohen was appointed to the CEO role in September.
Shares of GameStop closed at $14.84 per share on Wednesday, down more than 80% from their meme-trade high in January 2021. The stock rose 10% Thursday.

Stock chart icon

GameStop’s stock is well below its meme stock era highs.

Cohen’s status as a celebrity investor for the retail trader crowd has extended beyond GameStop, most notably trading in and out of Bed Bath & Beyond. That retailer filed for bankruptcy protection in April.
Cohen’s RC Ventures still owns 12% of GameStop, making him the company’s largest shareholder, according to FactSet.Don’t miss these stories from CNBC PRO: More

Raising the Social Security retirement age was recently suggested at a Republican presidential candidates’ debate.
The retirement age has been raised before. In 1983, the full retirement age went from 65 to 67.
Experts say other adjustments may help beneficiaries wait, and therefore increase their income in retirement.

zimmytws | iStock | Getty Images

There’s renewed focus on the Social Security retirement age, thanks to recent Republican presidential debates.
The Social Security board of trustees projects the program’s combined funds will run out in 2034, when just 80% of benefits may be payable. To prevent that, lawmakers may generally raise taxes, cut benefits or a combination of both.

One possible change — raising the retirement age — was debated when the Republican presidential candidates took the stage in November.
“What we need to do is keep our promises,” Republican presidential candidate Nikki Haley said. “Those who have been promised, should keep it. But for my kids in their 20s, you go and say we are going to change the rules, change the retirement age for them.”
The retirement age has been raised before. In 1983, when Social Security faced similar solvency issues, legislation was passed that made a host of changes, including boosting the full retirement age from 65 to 67. That change is still getting phased in today.
More from Personal Finance:Pension-eligible workers may face reduced Social Security benefitsHere’s what happens to your Social Security benefits after you dieThis purchase may be a ‘grenade’ to a well-planned retirement
Full retirement age is when beneficiaries may receive 100% of the benefits they have earned. Those who claim earlier than full retirement age will have their monthly checks permanently reduced.

Those who wait — up until age 70 — stand to receive up to an 8% boost for every year they wait past full retirement age.
“The difference between an age 62 benefit and an age 70 benefit is about a 77% increase,” said Jason Fichtner, chief economist at the Bipartisan Policy Center. “That’s huge.”
If the retirement age is raised again, that may make it so early claimants face a steeper cut.
Despite the benefits of waiting until age 70, almost 90% of today’s retirees claim earlier.
“For the vast majority of people, waiting longer to collect Social Security is your best financial deal, your best investment option,” said Teresa Ghilarducci, professor of economics at The New School for Social Research.
Experts say there are changes that may encourage beneficiaries to wait.

1.  Draw from other funds while delaying Social Security

Financial experts already recommend using other income sources, if possible, while waiting to claim Social Security benefits.
New research argues more can be done to encourage workers to rely on funds from retirement accounts such as 401(k) plans or individual retirement accounts — dubbed a Social Security bridge option — before claiming retirement benefits, according to the Schwartz Center for Economic Policy Analysis at The New School.
If a worker relies on their own savings until age 70, they may be able to boost their Social Security benefits by $1,000 a month from age 62, for a total of $2,480 per month, according to the research. But even waiting slightly longer, until age 63, for example, may result in benefits that are $100 higher per month.
The Social Security bridge option would be ideal for workers who have retirement accounts or extra income they may set aside. However, other policies would be needed to help those without retirement savings, according to the Schwartz Center for Economic Policy Analysis.

Employer-sponsored retirement accounts could incorporate bridge payment plans that would distribute payments as long as the funds last or until a retiree turns 70, according to the Schwartz Center for Economic Policy Analysis. Alternatively, a separate account for bridging may be established by the Social Security Administration.
“Once they do the hard work of accumulating money in their retirement account, there really needs to be an easy, straightforward way for them to decumulate in the way that people want,” Ghilarducci said.
“People want lifelong guaranteed income,” she said.

2.  Make bridge annuities more accessible

When it comes to Social Security, even just waiting a year to three years longer — to age 63, 64, or 65 — can make a big difference, according to economist Fichtner.
To cover income needed while a beneficiary delays their monthly checks, a bridge annuity may help, said Fichtner, who also serves as a senior fellow at the Alliance for Lifetime Income, an educational organization focused on raising awareness of annuities in retirement.
Annuities are financial products that provide a guaranteed stream of income. However, they require consumers to part with a lump sum of money.
But the trade-off may be worthwhile, according to Fichtner, particularly if it lets a retiree access the guaranteed growth delaying Social Security benefits provides.
Consumers who want to pursue this strategy should consult with a financial advisor. Annuity options may also become available within 401(k) or 403(b) retirement plans. However, less than 10% of plans currently offer annuities, according to the Bipartisan Policy Center.
Annuitizing isn’t for everyone, Fichtner noted, especially those who don’t have access to employer-sponsored plans or who don’t have meaningful savings.

3.  Establish a Social Security bridge benefit

Some workers who have physically demanding jobs cannot wait until full retirement age to claim Social Security benefits.
The creation of a bridge benefit, which would start at age 62 and last until full retirement age, may help cushion the cut they may otherwise take to their monthly income, suggested a recent task force report from the National Academy of Social Insurance.
Workers would be able to apply for the bridge benefit based on a history of having physically demanding jobs. The requirements to obtain the benefit would be most stringent at age 62, while this would gradually ease up to full retirement age.
The bridge benefit would provide half the difference between what a worker would receive at full retirement age and their reduced age 62 benefit. For example, if someone is eligible for $1,000 per month in Social Security benefits at full retirement age, and a $700 reduced benefit at age 62, the bridge benefit may raise their income to $850 at 62.
The change would cut the early claiming penalty in half, members of the task force noted during a November presentation of the report. Other countries have implemented similar benefits.

4. Provide more generous minimum benefits

Social Security provides a special minimum benefit to replace more income for workers who have had low earnings for many years.
Yet over time, the value of those special minimum benefits has diminished. While regular Social Security benefits are linked to wages, the special minimum benefit is tied to prices. As wages have grown faster than prices, today’s minimum benefit has become “gradually irrelevant,” according to the Schwartz Center for Economic Policy Analysis.
The special minimum benefit may be improved by raising the benefit levels, re-indexing them or changing eligibility rules, the research suggests.
Creating a strong minimum benefit should coincide with any increases to the retirement age, Fichtner said, to prevent claimants who have no choice but to take retirement benefits at 62 from facing deeper benefit cuts. More

ETF Strategist

For a couple of years, stocks have largely had an inverse relationship with economic data. The better the numbers, the worse the market has performed.
It may take a while for good news to become good again.

Taiwanese woman walking down the city street with umbrella and coffee on a rainy day
Mixetto | E+ | Getty Images

For a couple of years, stocks have largely had an inverse relationship with economic data. The better the numbers have been — whether weekly jobless claims, consumer sentiment or housing starts — the worse the market has performed and vice versa.
The phenomenon showed up last month when manufacturing, services and employment data all undershot expectations within days of one another. That batch of bad news caused bond yields to plummet, and stocks responded by notching their longest winning streak in two years.

It all begs the question: When does good news become good again and bad news bad?
The short answer is that it may take a while.

Markets may cheer ‘slow trickle of slightly bad news’

Indeed, inflation remains elevated, and while there’s been speculation about when the Fed will pivot, most policymakers are committed, at least publicly, to keeping rates “higher for longer.”
Therefore, markets are likely to welcome a slow trickle of slightly bad news in the weeks to come. That will prevent the Fed from hiking rates further, likely prompting additional declines in bond yields, allowing stocks to continue to rally, with utilities and other bond proxies potentially doing well. The same goes for defensive groups like consumer staples and healthcare companies. 

More from ETF Strategist

Here’s a look at other stories offering insight on ETFs for investors.

Nevertheless, bond yields getting too low is a problem because that would mean that the economic data is beginning to suggest that difficult-to-resolve challenges are right around the corner. All of this helps to explain why it’s tough to distinguish between a healthy slowdown (i.e., soft landing) and the initial stages of a recession — and why the next few job reports will be so significant.

The economy added about 150,000 jobs in October, a profound slowdown over the previous month. Nonetheless, investors cheered the report, believing it gave the Fed the ammunition it needed to hold off on further rate increases.

ETFs, small caps can offer buying opportunities

A more meaningful slowdown in new jobs over the coming months — 50,000 or below — would likely flip the bad-news-is-good-news script. Deep cyclical stocks that pay generous dividends would be attractive in such a scenario. But so would small caps.
In 2023, small, publicly listed companies have greatly underperformed, with the Russell 2000 lagging the S&P 500 by 13% year to date. The fact that small companies have struggled this year relative to the rest of the market is hardly surprising.  

Such firms tend to rely on floating-rate debt more than their larger peers, so their margins shrink when Fed policy is more restrictive. Complicating matters further are rising labor costs.
If the job market took a turn for the worse, many small caps — especially cyclically sensitive ones — would crater, eventually creating an attractive buying opportunity. The key would be to move before policymakers do because the market will have already reacted by the time the Fed officially pivots.  
The problem with small caps, however, is volatility: The ups and downs of smaller companies are more frequent and pronounced. That’s why it isn’t easy to feel good about taking individual positions in this segment of the market.
The alternative is to gain exposure via exchange-traded funds. One option is the iShares Russell 2000 ETF (IWM). Another fund that may underperform during a slowdown or recession but jump during the early stages of a recovery is the iShares Russell Mid-Cap Value ETF (IWS). 

Today’s bad-news-is-good-news dynamic might seem unique, but it isn’t. As with most things with the markets, it’s cyclical.
The good news is that a soft landing can happen if core inflation continues to trend toward the Fed’s 2% target and payroll growth remains positive. Yet those are far from sure things.
Indeed, if job creation comes to a screeching halt instead, look for small caps and deep cyclicals to suffer losses. At the same time, they could lead the markets higher during the initial bounce back. 
— Andrew Graham, founder and managing partner of Jackson Square Capital More

Supplemental Security Income, or SSI, provides monthly benefit checks to individuals who are elderly, blind or disabled and have little to no income or resources.
Because the program has not been updated in four decades, beneficiaries have low asset limits that hinder their ability to save in a 401(k) plan or earn raises.
At Wednesday’s Senate Banking Committee hearing, Wall Street CEOs including JPMorgan Chase CEO Jamie Dimon expressed their support for updating the program’s rules.

Morsa Images | Digitalvision | Getty Images

Current SSI asset limits ‘lock people in poverty’

Current SSI asset limits are extremely low — $2,000 for individuals and $3,000 per couple. Those thresholds apply to all kinds of assets, including cash, bank accounts, investments and household goods. Beneficiaries who go over the limits are suspended or terminated.
“The problem is SSI’s eligibility rules haven’t been updated by Congress — that’s on us — in 40 years,” Sen. Sherrod Brown, D-Ohio, said during Wednesday’s Senate Banking Committee hearing with leaders of Wall Street firms.
“They are now so outdated they lock people in poverty,” Brown said.
Experts from the Bipartisan Policy Center, Center on Budget and Policy Priorities and Century Foundation have called the program’s rules the “most regressive, anti-saving provisions in federal law.”

Other Wall Street executives show support

JPMorgan Chase Chairman and CEO Jamie Dimon speaks next to Bank of America Chairman and CEO Brian Thomas Moynihan and Citigroup CEO Jane Fraser during the U.S. Senate Banking, Housing and Urban Affairs Committee oversight hearing on Wall Street firms, on Capitol Hill in Washington, U.S., December 6, 2023.
Evelyn Hockstein | Reuters

Wells Fargo & Co. CEO Charles Scharf indicated the firm would be open to looking at the reform proposal.
“It sounds like something we would be willing to support,” Scharf said. “We would like to take a look at it.”
Citigroup CEO Jane Fraser said she supports the proposed changes “fully and wholeheartedly.”
All of the other Wall Street executives present affirmed their support, including Bank of America CEO Brian Moynihan, State Street CEO Ronald O’Hanley, BNY Mellon CEO Robin Vince, Goldman Sachs CEO David Solomon and Morgan Stanley CEO James Gorman.

It will take Congress’ vote to push the changes through, however.
Senate lawmakers who support the bill have vowed to attach it to any piece of moving legislation, Rebecca Vallas, a distinguished fellow at the National Academy of Social Insurance, noted during a November presentation of the nonprofit organization’s recent task force report.
“This is something that needs to happen, not just to support workers, but also to remove barriers to economic growth,” Vallas said.
Moreover, “huge numbers of employees” cannot participate in a 401(k) plan or cannot take raises because of SSI’s current asset limits, she said. More

As it stands, the new FAFSA is set to launch with outdated consumer price index figures from 2020, which don’t account for the recent runup in inflation.
Because of this oversight, experts say, millions of students could get less financial aid than they deserve.
This is just the latest complication in a rollout that has already proven problematic.

A simplified Free Application for Federal Student Aid is set to roll out by the end of the month.
However, the new FAFSA may launch with outdated inflation figures, which could mean many students “will get less financial aid than they deserve,” according to higher education expert Mark Kantrowitz.

“It is a pretty big deal,” he said. “We are talking about thousands of additional dollars that families will have to pay for college.”
While it’s hard to quantify exactly how many will be affected, “millions of students could receive less aid,” according to Kalman Chany, a financial aid consultant and author of The Princeton Review’s “Paying for College.”

A problem with the FAFSA affordability calculation

The new, simplified FAFSA form uses a calculation called the “Student Aid Index” to estimate how much a family can afford to pay. But as it stands, the forthcoming FAFSA relies on old consumer price index figures from 2020, which don’t account for the recent runup in inflation.
More from Personal Finance:Fewer students are enrolling in collegeThe new FAFSA will be available by Dec. 31What to consider before refinancing a student loan
The Consolidated Appropriations Act stipulated that the U.S. Department of Education is required to update the SAI tables every year based on the latest CPI data.

This year, though, the Secretary of Education didn’t make those updates in time.
The Department of Education has said that it doesn’t plan to update those tables this year, but will update them for the 2025-26 aid cycle.
“In prior years it wouldn’t matter all that much because inflation was low,” Chany said. In this case, “the numbers are significantly understated.”
“Given the high inflation in the past few years, the tables should be adjusted by a tad more than 18%,” he added.

All families of four in this application cycle with adjusted available income over $35,000 will be affected by the failure to make inflationary adjustments, with middle- and higher-income students the hardest hit, according to Kantrowitz. There will be less of an effect on lower-income students whose expected family contribution was already $0.  
For example, a typical family in New York with adjusted available income of $100,000 could be expected to contribute $12,943 instead of $9,162 toward their annual college costs — a difference of nearly $4,000 in aid, according to calculations by Kantrowitz.

Issues mount ahead of the new FAFSA’s launch

“The FAFSA simplification, in part, was intended to expand eligibility,” Kantrowitz said. “This fumble with the formula, among other changes … makes it harder, especially for middle-income families,” he said.
For instance, the Department of Education also said it will no longer give families a break for having multiple children in college at the same time, effectively eliminating the “sibling discount.”
Experts say this is just the latest complication in a process that has already caused confusion and frustration. And there may be additional issues when the form finally launches online on or before Dec. 31 after a significant delay.
“This is not going to be streamlined,” Chany said. “It’s going to be very messy.”
Subscribe to CNBC on YouTube. More

The Biden administration announced on Wednesday that it would forgive an additional $4.8 billion in student loan debt, for 80,300 borrowers.
The relief is a result of the U.S. Department of Education’s fixes to its income-driven repayment plans and Public Service Loan Forgiveness program.

U.S. President Joe Biden gestures as he delivers remarks on aid to Ukraine from the White House in Washington, U.S., December 6, 2023. 
Kevin Lamarque | Reuters

The Biden administration announced Wednesday that it would forgive an additional $4.8 billion in student loan debt, for 80,300 borrowers.
The relief is a result of the U.S. Department of Education’s fixes to its income-driven repayment plans and Public Service Loan Forgiveness program.

“Before President Biden took office, it was virtually impossible for eligible borrowers to access the student debt relief they rightfully earned,” U.S. Secretary of Education Miguel Cardona said in a statement. “This level of debt relief is unparalleled and we have no intention of slowing down.”

More from Your Money:

Here’s a look at more stories on how to manage, grow and protect your money for the years ahead.

More than $2 billion of the aid will go to nearly 46,000 borrowers enrolled in income-driven repayment plans. Those plans are supposed to lead to debt forgiveness after a set period, but this often didn’t happen because loan servicers failed to keep track of borrowers’ payments, experts say.
In addition, 34,400 borrowers who have worked in public service for a decade or more will receive $2.6 billion in loan cancellation, the U.S. Department of Education said. Borrowers in the Public Service Loan Forgiveness program have also struggled to get the debt erasure they’ve been promised due to errors in their payment counts and other issues.
The Biden administration has now cancelled nearly $132 billion in student debt for more than 3.6 million Americans.

Forgiveness may set Biden apart in election

The actions are likely to help President Joe Biden as he runs for reelection, said higher education expert Mark Kantrowitz.

“Biden has forgiven more student loan debt than any previous president,” Kantrowitz said. “It distinguishes him from other candidates.”
Republican nominees for president oppose student loan forgiveness.
Former New Jersey Gov. Chris Christie has said that Biden didn’t have the authority to cancel student debt without prior authorization from Congress.

“He knows he’s done something that is illegal and over the top,” Christie said on ABC’s “This Week” in 2022, shortly after Biden announced his sweeping debt forgiveness plan, which the Supreme Court ultimately rejected in June. At an estimated cost of about $400 billion, that plan would have been one of the most expensive executive actions in history. 
Former President Donald Trump sided with the Supreme Court.
“Today, the Supreme Court also ruled that President Biden cannot wipe out hundreds of billions, perhaps trillions of dollars, in student loan debt, which would have been very unfair to the millions and millions of people who paid their debt through hard work and diligence; very unfair,” Trump said at a campaign event in June.

Florida Gov. Ron DeSantis has said that it’s wrong to saddle taxpayers with the expense of student loan forgiveness.
“Why should a truck driver have to pay for somebody that got a degree in zombie studies?” DeSantis said at an Iowa event in early August. “It doesn’t make sense.”
Voters support forgiving at least some student loan debt by a 2-to-1 margin, according to a Politico/Morning Consult poll. Less than a third oppose the policy. More

The IRS is sending more than 20,000 rejection letters to taxpayers who wrongly claimed the employee retention credit, or ERC.
Starting this week, ineligible taxpayers will begin receiving copies of Letter 105 C for disallowed claims.
Later this month, the IRS will unveil a “voluntary disclosure program” for taxpayers with erroneous ERC filings.

IRS Commissioner Daniel Werfel speaks during an IRS event on August 2, 2023 in McLean, Virginia.
Alex Wong | Getty Images

The IRS is sending more than 20,000 rejection letters to taxpayers who wrongly claimed a pandemic-era tax break as the agency continues its crackdown on “dubious” filings.
Created to support small businesses during the Covid-19 pandemic, the employee retention credit, or ERC, is worth thousands of dollars per eligible employee. However, the tax break sparked a wave of companies pushing small businesses to wrongly claim the credit — and the agency temporarily stopped processing new filings in September amid a “surge of questionable claims.”

“With the aggressive marketing we saw with this credit, it’s not surprising that we’re seeing claims that clearly fall outside of the legal requirements,” IRS Commissioner Danny Werfel said in a statement Wednesday.
More from Personal Finance:Supreme Court case on ‘income’ could have major implications for taxpayersCredit card debt is ‘the biggest threat to building wealth,’ poll findsJob data suggests ‘soft landing’ is increasingly likely, economists say
Starting this week, ineligible taxpayers will start receiving copies of Letter 105 C for disallowed claims. Later this month, the IRS will unveil a “voluntary disclosure program” for taxpayers who wrongly claimed the credit. The agency is rejecting filings from entities that didn’t exist or didn’t have paid employees during the eligibility period.

“The action we are taking today is part of an initial set of steps in our compliance work in this area,” Werfel said. “More letters will be going out in the near future, including both disallowance letters and letters seeking the return of funds erroneously claimed and received.”
The announcement comes less than two months since the IRS unveiled a special withdrawal process for small businesses that wrongly claimed the credit to avoid repayment, interest and penalties.

Don’t miss these stories from CNBC PRO: More

The Fed could begin to cut interest rates in 2024 after 18 months of hikes, experts say, so it’s important to take advantage of financial products that benefit from high interest rates while you can.
“A lot of people are leaving free money on the sidewalk when they walk by,” said Stacy Francis, a CFP and president and CEO of Francis Financial.

Shoppers walk with items during Black Friday deals at a Target store in Westbury, New York, U.S., November 24, 2023. 
Shannon Stapleton | Reuters

After more than a year of dealing with rapid inflation, consumers have become numb to higher prices. But as inflation cools, experts say there are strategies that can help you weather current conditions and prepare for a shift in interest rates.
The October consumer price index increased 3.2% on an annual basis, according to the Bureau of Labor Statistics’ monthly inflation report, down from a Covid-era peak of 9.1% in June 2022. The personal consumption expenditures price index — the Federal Reserve’s preferred gauge — also shows signs of inflation cooling.

CNBC spoke with several financial advisors about how consumers can make the most of their money as the market anticipates the end of the Fed interest rate hike cycle and inflation declines closer to its target rate of 2%. The first place to look: your savings account.
More from Personal Finance:IBM to end 401(k) match, offering a hybrid planInvestors in money market mutual funds could see a higher tax billNot saving in your 401(k)? Your employer may re-enroll you
“The no brainer, and quite frankly, easiest thing to do is take that money that you have sitting in cash and make sure that you’re getting the most from it,” said certified financial planner Stacy Francis, the president and CEO of Francis Financial in New York City. Francis is also a member of CNBC’s FA Council.
Here’s how you can benefit from that move and others.

Get your cash working for you

The Fed could begin to cut interest rates in 2024 after 18 months of hikes. So it’s important to take advantage of financial products that benefit from high interest rates while you can, said CFP Marguerita Cheng, the CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland. Cheng is also a member of CNBC’s FA Council.

Certificates of deposit, for example, are offering higher yields than high-yield saving accounts. While your savings account rate can change at any time, CDs let you lock in a rate for a set period — which can be beneficial now ahead of any Fed rate cuts next year.
With CD ladders, investors can divide equal amounts of cash across a range of CDs that each have a different maturity date. When the CDs with shorter terms expire, those proceeds can be invested into CDs with a longer maturity.

“If you start locking in some higher rates now [as CD ladders allow for], that might be a good thing,” said Cathy Curtis, a CFP and the founder and CEO of Curtis Financial Planning in Oakland, California. Curtis is also a member of CNBC’s FA Council.
Money market funds, which are mutual funds that are usually invested in short-term, lower-credit-risk debt, may also appear like a “no brainer” way to outpace inflation, given many funds are currently paying well over 5%, Francis said.

Add ‘engines’ to your investment portfolio

As those higher-yield opportunities begin to wane, a higher percentage of equities in your investment portfolio “is a good place to be right now,” Curtis said.
Inflation hurt some stock prices during the Fed’s hiking cycle because investors deemed the risk of equities not worth it while cash was generating 5% to 6%. But a steady pace of inflation helps capital assets grow, increasing the benefits of a healthy allocation of equities in your investment portfolio. And as the Fed is poised to start cutting rates next year, equities’ risk profile improves. Recent stock outperformance — tech stock were up 10% last month alone — is in part a reflection of this changing market outlook.
Above all, “engines” like equities allow consumers to have a longer-term horizon that can better ride out inflation, Francis said.
Examples include consumer staples stocks that pay consistent dividends, and mutual funds and ETFs whose dividends can be reinvested in stock portfolios to minimize the downside of the current volatility, Cheng said. Real estate investment funds are also positioned especially well to outperform following the end of the rate hike cycle, said Shon Anderson, a certified financial planner at Anderson Financial Strategies in Dayton, Ohio.

Making the most of your workplace retirement plan can also serve as an engine. Take advantage of “free money” in the form of the employer match, Francis said — make sure you’re contributing enough to get the full match.
“A lot of people are leaving free money on the sidewalk when they walk by,” Francis said.

Revisit spending habits and large expenses

While the worst of inflation may be behind the U.S. economy, consumers still feel its pinch when shopping for everyday goods and paying regular expenses. That’s because inflation is declining gradually, which means prices are still rising but at a slower pace. (Although, a few products have seen prices fall year over year.)
Re-evaluating spending habits to see where you can save money is always wise, especially during the holiday season, experts said. Walmart chief financial officer John David Rainey recently told CNBC consumers are “leaning heavily” into major promotions as they watch their spending and search for deals. 
Adjust your shopping habits by visiting grocery stores in your area that carry the best deals, Curtis said.
Francis’ family is focusing on buying experiences — such as a cooking class — rather than gifts for the holidays, given that experiences have not seen as much inflation.

If your budget is strained, it may also still worth assessing more significant changes. Some people may consider downsizing their house or moving to a more affordable area, Francis said.
“Of all the things, I see what people are most hesitant to do is downsizing. But I will also tell you that it’s one of the moves that can give you the most the most peace of mind,” she said. More