Investing

If you’re looking for ways to trim your yearly tax bill, experts may check your portfolio, since some investments are more likely to trigger taxes in certain accounts.
Generally, assets creating income are better suited for a tax-deferred or tax-free account.
However, you’ll also need to consider your goals and timeline when deciding where to keep your investments.

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If you’re looking for ways to trim your yearly tax bill, experts may check your portfolio, since some assets are more likely to trigger taxes in certain accounts.
Your 401(k) account offers tax-deferred growth, meaning you won’t owe levies on yearly income, such as dividends and capital gains.

By contrast, you may owe taxes for selling assets or receiving income in a brokerage account, which may be a surprise for some investors.
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“I definitely take that into consideration when I’m designing portfolios for clients,” said JoAnn May, a certified financial planner at Forest Asset Management in Berwyn, Illinois. “I always keep the taxability of assets in mind when strategizing where things are going to go.”
If you have three types of accounts — brokerage, tax-deferred and tax-free — you can pick the best spot for each asset, said May, who is also a certified public accountant. 
Since bonds may have less growth but distribute income, they may be suitable for tax-deferred accounts like your 401(k) plan, she said, and investments most likely to appreciate may be ideal for tax-free accounts, like a Roth individual retirement account.

However, if you don’t have the three account options, there may be other opportunities for tax efficiency, May said.
For example, if you have a large enough bond portfolio, you may have to put some assets in a brokerage account. But depending on your income, you may consider municipal bonds, she suggested, which generally avoid federal levies and possibly state and local taxes on interest. 
Other assets to avoid in a brokerage account are real estate investment trusts, or REITs, which must distribute 90% of taxable income to shareholders, said Mike Piper, a CPA at the firm in his name in St. Louis.

“If you have to have [funds] in taxable accounts, you want to make sure it’s generally something with low turnover,” he said.
Exchange-traded funds or index funds generally spit off less income than actively-managed mutual funds, which typically have year-end payouts.
Of course, taxes aren’t the only factor when deciding where to keep your assets. You’ll also need to consider your goals and timeline.

There’s a tax risk for all-in-one funds

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Another investment that’s better suited in tax-deferred or tax-free accounts is all-in-one funds, which attempt to create a whole portfolio, such as target-date funds, an age-based retirement asset.   
Since all-in-one funds contain different types of assets, there’s no ability to put certain portions, such as bonds spitting off income, into a more tax-efficient spot, Piper explained.  
These investments also limit your ability to use tax-loss harvesting, or sell assets at a loss to offset gains, because you can’t change the underlying holdings, he said. 

For example, let’s say your all-in-one fund has U.S. stocks, international stocks and bond funds. If there’s a dip in domestic stocks, you can’t harvest those losses by selling only that portion, whereas you may have that choice if you own each fund individually.
You may also see excess turnover from the underlying funds, creating capital gains that may be taxed at regular income rates, depending on the length of ownership.   
“They’re really just not a great fit for taxable accounts,” Piper added.

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Make purchases with a zero-interest credit card only. Any interest you pay for most credit card purchases you’re not paying off by the end of the month will negate any holiday sales savings.
Consider buying extra warranty coverage when the replacement cost for an item will be greater.
When car shopping, look for lower loan rates at local credit unions.

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Eager to take advantage of Presidents’ Day sales, many shoppers may not realize how much holiday discounts on a range of items – from mattresses to home appliances and electronics to new cars – could really cost them.
“Consumers should look closely at the fine print and long-term financial impact of spending around the holidays,” said Nicole Elam, president and CEO of the National Bankers Association, a trade group representing minority-owned and women-owned financial institutions. “For two reasons – the impact of inflation during a pandemic era and interest rates – what appears to be a deal may not be.”

Shopping smart is essential

“I love a sale,” said certified financial planner Kamila Elliott, CEO and senior wealth advisor at Collective Wealth Partners in Atlanta. But, before making that purchase, she said, it’s important to answer three questions.
“You have to ask yourself: Do you need it? Do you love it? And, can you pay it off immediately?”
Before you charge the purchase to a credit card, remember this is one of the most expensive ways to borrow money. The annual percentage rate on a credit card is at an all-time high of nearly 20%.
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“If you don’t have the ability to pay off the credit card debt immediately, you’re not even getting the savings from the sale because you’ll be paying that interest over a month or several months,” said Elliott, who is also a member of CNBC Financial Advisor Council.

Consider these three strategies to help save money while you shop for holiday sales:

Use a 0% interest credit card: With this type of introductory offer, you may pay no interest for 12 to 18 months. Make minimum monthly payments (or a little more) over the promotional period. Your goal should be to fully pay for the purchase before the 0% interest period ends and the rate goes back up. Credit experts say that a cash-back rewards credit card with a 0% interest introductory offer may be an even better deal. Several cash-back cards give back a flat rate of 1.5% of the amount of your purchase no matter what you buy.
Compare replacement cost vs. warranty: An extended home appliance or electronics warranty may give you peace of mind, but read the contract to see what exactly it covers. How long does the warranty last? Who will make repairs? How quickly?Compare the warranty’s cost over time to the replacement cost of that item, Elliott said. It may be more cost-effective to put that “extra” money in a special, savings account earmarked for a new appliance if yours breaks. In some cases, if the product is something you really need immediately – like your smartphone or laptop – it may be worth it to buy the warranty, Elliott said.
Look for lower loan rates at a credit union: Many car brands offer Presidents’ Day deals that lower the purchase price or interest rates or make lease deals more attractive. Still, with the rise in auto loan rates, you pay much more than you had imagined – or can truly afford to – drive the new car off the lot. Shop around and check out credit unions for lower interest rates.The average price for a new car was over $47,000 at the end of last year. Monthly payments averaged over $700 with some consumers paying $1,000 or more. Instead of paying over 6% in interest on a 60-month car loan through a bank or dealership, check out rates at a credit union. You may find rates under 5%.

No matter what you’re buying this holiday weekend, research the product’s price history, said Consumer Reports shopping editor Mary Beth Quirk. 
“If it’s recently been on sale for a lot less, you have some wiggle room in terms of how soon you need the item, you may want to wait to see if it drops again,” she said.
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With rents at historic highs, deciding what you should spend on housing is an increasingly difficult task.
Housing experts have some strategies to figure it out.

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There’s often a chasm between theory and practice, what we should do and what we actually do. Yet, when it comes to the long-held advice for renters to not spend more than 30% of their income on housing, the target is increasingly impossible to even try to reach, experts say.
“The old 30% guideline is just unrealistic these days,” said Marc Hummel, a licensed real estate salesperson at Douglas Elliman in New York.

More often, Hummel said, tenants spend 40% of their income, or more, on housing. “With vacancy rates at record lows and rents near some of the highest on record, it’s become increasingly more difficult to spend less,” he said.
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Indeed, nearly 15 million renter households in the U.S. are considered cost-burdened, meaning they’re spending more than 30% of their income on rent and utilities. In some cities, the situation is especially dire. For example, in New York, a household with the area’s median income would need to pay nearly 69% of their earnings to rent the average-priced apartment, according to Moody’s Analytics.
There are major consequences to taking on a rent that eats up too much of your income, Hummel said. “Spending more on rent means less money for savings, retirement, family goals and less to pay for other debt obligations,” he said.
Housing is the single biggest financial area where people get trapped, according to personal finance blogger and author Ramit Sethi. “Which is why it’s so important to follow some general guidelines when you’re deciding how much you can afford,” said Sethi, who wrote “I Will Teach You To Be Rich.”

‘A week’s pay for a month’s rent’

Renters used to be advised to spend even less than 30% on housing, said Andrew Aurand, senior vice president of research at the National Low Income Housing Coalition. In 1969, the Housing and Urban Development Act required public housing residents to contribute just 25% of their earnings toward rent, Aurand said.
“That percentage stemmed from the Depression of the 1930s, when a common rule of thumb was ‘a week’s pay for a month’s rent,'” he said.

In practice, there are a variety of factors that should determine what’s the right share for a household to spend on their housing, Aurand said. For example, a married couple without children may be able to spend more on their rent than another married couple with the same income that does have kids.
One simple way to measure if your housing costs are affordable, Aurand said, is to calculate how much of your income is left over to cover your other bills once your rent is paid.
“After paying for their housing, does the household have adequate income to pay for their non-housing expenses?” he said. “If not, they are considered cost-burdened.”

30% not a hard and fast rule

Renters shouldn’t look at the 30% guideline as a hard and fast rule, said Allia Mohamed, co-founder and CEO of Openigloo, which allows renters to review buildings and landlords across the U.S.
“Every renter is different,” Mohamed said.
High-income renters, for instance, should often spend below that threshold, she said. “Just because you make $300,000 a year doesn’t mean you should rent an apartment for $7,500 just because you can,” she said.

After paying for their housing, does the household have adequate income to pay for their non-housing expenses?

Andrew Aurand
senior vice president of research at the National Low Income Housing Coalition

Meanwhile, a lower-income tenant may be able to direct more than 30% of their income to housing if they don’t have other large recurring expenses, such as loan payments, Mohamed said.
She advises renters to create a detailed budget of their monthly expenses, but to also include what they’d like to be setting aside for savings and/or investments. This can help them determine how much is left over for housing costs.

‘We can’t throw our hands up’

Too many people, especially in expensive cities, decide that finding an affordable rent is unrealistic and then end up spending way too much, Sethi said.
“We can’t throw our hands up at the biggest expense of all,” he said. “We have to develop a real strategy for handling it.”

Ideally, Sethi said, people should aim to spend no more than 28% of their gross income on their rent costs. (These include, he added, utilities, furniture, repairs, etc.)
“If you have no debt, you can stretch the number a bit,” he said. In certain expensive cities, Sethi added, “they might spend 30%, 32%, even 35%.”
However, he cautioned, “above that, you’re exposing yourself to serious risk” in the event you lose your job or experience another setback.

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Exterior of a redesigned Chipotle restaurant
Source: Chipotle Mexican Grill

With market conditions as uncertain as they are now, it may be prudent to have a long-term approach and turn to the experts for guidance.
Here are five stocks chosen by Wall Street’s top analysts, according to TipRanks, a platform that ranks analysts based on their past performances.

Wynn Resorts

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Wynn Resorts (WYNN) reported a higher-than-anticipated adjusted loss per share for the fourth quarter. Nonetheless, investors were pleased with the management’s commentary about better times ahead, backed by continued strength in Las Vegas and the reopening of Macao following China’s stringent Covid lockdowns.
Deutsche Bank analyst Carlo Santarelli thinks that the future margin profile of Wynn Macau is “underappreciated.” Moreover, he expects the company’s financial leverage reduction to be “swift and screen well throughout 2023.”
“Given the resurgence of Macau, the continued strength and near term visibility in Las Vegas, and what we view as stability at Encore Boston Harbor, our estimates for 2023 and 2024 are higher across each of the 3 geographies,” Santarelli said.
Santarelli also noted that the stock’s valuation is reasonable, as the company is still in the early stages of the Macao recovery cycle. Santarelli reiterated a buy rating and raised his price target for Wynn to $128 from $106. (See Wynn Blogger Opinions & Sentiment on TipRanks)
Santarelli’s recommendation is worthy of consideration as he ranks 26th among more than 8,000 analysts tracked by TipRanks. Moreover, 67% of his ratings have been successful, generating a 21.7% average return per rating.

Chipotle Mexican Grill

Burrito chain Chipotle Mexican Grill’s (CMG) lower-than-anticipated fourth-quarter results reflected the impact of inflation on consumer spending. However, the company assured investors that transaction trends turned positive in 2023, setting its comparable sales growth estimate in the high-single-digit range for the first quarter.
Chipotle plans to further expand its footprint, which stood at 3,187 restaurant locations at the end of 2022. It aims to open 255 to 285 new locations in 2023.     
Baird analyst David Tarantino, who ranks 320 out of 8,346 analysts on TipRanks, lowered his 2023 earnings per share estimate following the lackluster fourth-quarter results and a lower-than-projected margin outlook for the first quarter. Nevertheless, Tarantino remains bullish on Chipotle.
“We came away with a view that management is taking the appropriate operational steps to drive structural improvements in traffic as 2023 unfolds, and we expect signs of progress on this front to help resolve the pricing/traffic debate and return the focus toward the significant economic value CMG can create via high-ROIC unit expansion,” Tarantino said
The analyst reiterated a buy rating on Chipotle stock and raised the price target to $1,900 from $1,800. Sixty-six percent of Tarantino’s ratings have generated profits, with each one bringing in a 10.6% average return. (See CMG Insider Trading Activity on TipRanks)

Meta Platforms

Social media behemoth Meta Platforms (META) is next on our list. Meta has rebounded this year after a disastrous run in 2022. Its problems last year were due to a slowdown in online advertising spend and the mounting losses of the company’s Reality Labs division — which includes its metaverse projects.  
Despite weak earnings, the stock spiked in reaction to recent results, as investors cheered Meta’s cost control measures and a $40 billion increase in its share repurchase authorization. Meta already had nearly $11 billion remaining under its existing buyback plan. 
Tigress Financial Partners analyst Ivan Feinseth highlighted that Meta’s “most valuable asset” is its huge and growing user base. Daily Active People or DAP (the number of people using at least one of the company’s core products — Facebook, WhatsApp, Instagram, or Messenger, every day) rose 5% to 2.96 billion in the fourth quarter.
Furthermore, Feinseth projects that Meta’s performance will be fueled by a “new, more cost-efficient data center structure” that is competent in supporting artificial intelligence (AI) and non-AI workloads.
Feinseth increased his price target for Meta to $285 from $260 and reiterated a buy rating as he believes it can outperform rivals due to its massive user base and the ability to generate significantly higher returns for advertisers.
Feinseth currently stands at #126 among over 8,300 analysts on TipRanks. Moreover, 65% of his ratings have been successful, with each generating a 13.5% average return. (See Meta Platforms Hedge Fund Trading Activity on TipRanks)

CyberArk Software

Digital transformation, the accelerated shift to the cloud and geopolitical tensions have triggered an increase in cyber threats, driving demand for cybersecurity companies like CyberArk (CYBR).
CyberArk, a leading cybersecurity company, has successfully transitioned from perpetual licenses to a subscription model — which has led to more reliable and predictable revenues.  
Mizuho analyst Gregg Moskowitz noted the impressive 45% growth in CyberArk’s annual recurring revenue (ARR) as of 2022’s end and ARR growth outlook in the range of 28% to 30% by the end of 2023. The analyst also pointed out that CyberArk ended 2022 with more than 1,300 customers generating over $100,000 in ARR, up 40% compared to the prior year.  
Moskowitz reiterated a buy rating on CyberArk stock and a $175 price target, saying, “We continue to view CYBR as a primary beneficiary of a heightened threat landscape that has amplified the need for privileged access and identity management.” He is also optimistic that CyberArk’s transition to a recurring revenue model will drive better financials.
Moskowitz holds the 236th position among more than 8,000 analysts on TipRanks. His ratings have a 58% success rate, with each delivering an average return of 13.8%. (See CyberArk Stock Chart on TipRanks)

Micron Technology

Semiconductor company Micron (MU) has been under pressure in recent quarters due to lower demand in several end-markets, particularly PCs. In the first quarter of fiscal 2023 (ended Dec. 1), the company’s revenue plunged 47% due to lower shipments and a steep decline in prices.
In response to tough business conditions, Micron has slashed its capital expenditure and has been taking initiatives to reduce costs. In December, the company announced that it would cut its workforce by nearly 10% in 2023 and suspend bonuses for the year. It has also suspended share repurchases for now.
Despite the ongoing challenges, Mizuho analyst Vijay Rakesh upgraded Micron to buy from hold and raised his price target to $72 from $48. Rakesh acknowledged that near-term headwinds remain due to high inventories, lower demand for PCs, handsets, servers and lower memory pricing. Nonetheless, he thinks that we are approaching a “cyclical bottom.”
Rakesh explained, “We believe memory sets up better for 2H23/2024E with supply/capex cuts, inventory correction behind, and a better pricing environment.”
Rakesh ranks 73 out of more than 8,300 analysts on TipRanks, with a success rate of 61%. Each of his ratings has delivered a 19.7% average return. (See Micron Financial Statements on TipRanks)

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The average participant account balance at Vanguard was $112,572 at the end of 2022, down 20% from the close of 2021.
The median balance was $27,376 at the end of last year, an annual drop of 23%.
Hardship withdrawals ticked up slightly, but remain a low share of all participant activity at 2.8%.

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There’s no question 2022 was a rough year for investors.
With record-high inflation, economic uncertainty and aggressive interest rate hikes from the Federal Reserve to combat rising prices, stocks took a beating. All three of the major indexes had their worst year since 2008: The S&P 500 Index dropped 19.4%, the Dow Jones Industrial Average sank 8.8% and the Nasdaq Composite Index lost 33.1%.

Yet most 401(k) plan participants rode out the storm — and many increased their contributions, according to a new analysis from Vanguard that’s a preview of its annual How America Saves report.
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As of year-end 2022, the average participant account balance at Vanguard was $112,572, down 20% from a year earlier, the research shows. The median balance — half were above, half below — was $27,376 at the end of the year, a 23% decrease.
At the same time, though, 39% of participants’ deferral rate — the portion of their paycheck directed to their 401(k) account — climbed higher, compared with 9% of investors who decreased their contributions. While many initiated the increase on their own, more than half of the boosts came from the plan’s yearly automatic escalation.
“Despite economic headwinds, we were pleased to see that participant behavior in retirement plans remained in line with previous years, and most participants continued to maintain a long-term view,” said Dave Stinnett, head of strategic retirement consulting at Vanguard.

Trading remained low among 401(k) investors

Additionally, just 2% of the investors in target-date funds made any exchanges (59% of participants are in those funds). Among those not in target-date funds or other professionally managed allocations, only 6% did any trading, the lowest point in 20 years, according to Vanguard.
And, although hardship withdrawals ticked up, they remain a small share of all participants. Last year, 2.8% took such a withdrawal, compared with 2.1% in 2021.
“The uptick … may have been driven by individuals’ personal finance situations, with U.S. households facing some tough economic challenges in 2022,” Stinnett said. “Several government moves since 2018 have also loosened the rules for taking the distributions, so we believe that may have also been a factor in the increase.”

Inflation, at 6.4% over the last year, remains a problem

Meanwhile, economic headwinds remain. The latest inflation reading showed a 6.4% increase over the last 12 months — which remains far above the Fed’s target rate of 2%. This suggests additional rate hikes are on the way, which makes the cost of borrowing more expensive for consumers and businesses.

“The big question around inflation is can the Fed get that under control without costing people their jobs and causing further declines in the market,” said certified financial planner Douglas Boneparth, president of Bone Fide Wealth in New York.
While all three of the major stock indexes have trended upward since early January, it’s impossible to know with certainty whether the higher momentum will continue. Through midday Friday, the S&P has risen about 6% in 2023, the Dow has climbed 1.7% and the Nasdaq has gained nearly 13%.
“We’re starting out the year on a positive note … which is a nice reprieve from the carnage that was 2022,” Boneparth said.

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The AltFinance Fellowship is introducing more than 100 students at historically Black colleges and universities to a $10 trillion industry that includes private equity, private credit and commercial real estate.
Ares Management, Apollo Global Management and Oaktree Capital Management are spending $90 million over the next decade to fund the fellowship.
In 2020, Black people accounted for 1% to 2% of the investment deal teams in the private equity space, according to McKinsey.

Antony Ressler, co-founder of Ares Management, takes photos with students of the AltFinance Fellowship.
Marcus Shaw, AltFinance

The search for bigger profits and top talent is nothing new on Wall Street, but some firms are turning to an almost untapped resource: historically Black colleges and universities, or HBCUs.
The AltFinance Fellowship is the brainchild of top alternative investment firms Ares Management, Apollo Global Management and Oaktree Capital Management. The three firms are investing $90 million over 10 years into the program, which is providing more than 100 students at HBCUs with paid experience, mentorship and networking opportunities.

Selected students will also receive a scholarship of up to $10,000 if they’re sophomores, while juniors and seniors can receive up to $15,000. Partnering schools include Clark Atlanta University, Howard University, Morehouse College and Spelman College.
The program aims to give students of color an opportunity in a booming industry that hasn’t been the most diverse. The private equity, private credit and commercial real estate industry has about $10 trillion in assets under management, according to data provider Preqin. Meanwhile, in 2020, Black people accounted for 1% to 2% of the investment deal teams in the private equity space, according to management consulting firm McKinsey.
“This is not a charitable activity,” Howard Marks, co-chairman of Oaktree Capital Management, told CNBC. “I think it has some socially beneficial aspects to it. But that’s not the only reason we’re doing it. We’re also doing it because we believe it can enrich our organizations.”
Indeed, chief investment officers of leading institutional investors said they would allocate 2.6 times as much capital toward more ethnically and racially diverse private-equity deal teams if they were choosing between two comparable firms, according to a 2022 report from McKinsey.

An opportunity to build wealth

Marc Rowan, CEO of Apollo Global Management, and Marcus Shaw, CEO of AltFinance

AltFinance is also giving students an opportunity to enrich themselves. Alternative investing has boomed since 2000 following the dot-com bubble, according to Preqin. Further, employee compensation in the industry can be lucrative, even as new graduates embark on their careers.

In 2020, the average base salary for associates — an entry-level position — at private equity firms was $137,000, according to data from executive search company Heidrick & Struggles.
“It’s the potential to grow generational wealth,” Howard University sophomore Brittany Clark told CNBC, “Personally, from my background making six figures out of college is unheard of, so when I talk about it with my parents it’s shocking.”

“Coming from humble beginnings myself, I didn’t know much about alternatives or finance or the jobs and opportunities that are available to me.” said Morehouse College senior Joseph Ramirez. “Now, I’m learning the tools necessary to be able to create generational wealth.”
AltFinance CEO Marcus Shaw said the program’s potential impact goes beyond Wall Street.
“The students that we have in our program were destined for greatness, no matter what path they were going to take.” Shaw told CNBC. “But by giving them an opportunity to look behind the veil and see what lies ahead of them in the career in alternative investments, [it] creates another opportunity for them to build wealth for themselves, their family and their communities. There is a trickle-down effect… that will not only create stronger families for them but stronger communities.”
Ares Management co-founder Antony Ressler and Apollo Global Management CEO Marc Rowan both said the fellowship has the potential to increase representation in the industry in the near term and profits for the firms in the long term.
“We are a culture of finding that which is not well understood,” Rowan told CNBC. “And increasingly that comes from having diverse points of view at the table, and diverse backgrounds and diverse ways of looking at things and then diverse ability to develop [and] deliver a message to a diverse set of clients.”
“The more perspectives you have, the better the investor you are.” Ressler told CNBC. “So the idea of being a more diverse company, for us is a positive. It’s good for business. It’s good for our investment decisions. It’s good for our employee base. And it’s precisely what we think we should be doing.”

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A look at the latest consumer price index inflation data shows, in many cases, the cost of going places is still high.
Gas prices rose in January, contributing to a higher inflation print for the month.
Meanwhile, other categories, including airfares and new cars, have risen in the past year.

A gas station in Arlington, Virginia.
Xinhua News Agency | Xinhua News Agency | Getty Images

New government data for January shows high inflation has continued into the new year.
That has some economists worried high prices may prove to be sticky, even as the Federal Reserve works to slow inflation by raising interest rates.

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2 days ago

Yet as some prices climbed, others subsided, according to the January consumer price index data released by the U.S. Bureau of Labor Statistics on Tuesday. The CPI measures changes in consumer prices by measuring a basket of goods and services over time.
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Transportation costs were one area where prices were in flux.
Notably, a jump in gasoline prices was one of the contributors to an overall 0.5% increase in the CPI for the month. Gasoline rose 2.4% in January, while it fell 7% the previous month.
Yet looking back at the past 12 months, gasoline – at 1.5% – did not make the list of top costs. (The benchmark inflation for all items came it at 6.4%.)

Meanwhile, fuel oil dipped 1.2% in January but was up 27.7% for the past 12 months.
While high gas prices made headlines in 2022, prompting gas tax holidays in some states, those prices have subsided from last year’s highs.
The national average for a gallon of gas is $3.42, AAA reported on Thursday, up a penny from the previous week. The highest recorded average price was $5.02 as of June.
Gas prices “did rise in January and that was mostly due to the weather,” said Andrew Gross, spokesperson at AAA. Winter storms affected refineries on the Gulf Coast and in California. Separately, a weather-unrelated fire at a Colorado refinery is also causing problems.

Oil prices also influence about 60% of what consumers pay at the pump, according to Gross.
January’s jump in gas prices is one example of how the slowing inflation — or disinflation — will not necessarily happen in a “straight line,” according to Brett House, professor of practice in economics at Columbia Business School.
“You have the potential for exogenous shocks or economic shocks that are coming out of the blue that don’t have an economic underpinning to them … knocking prices for substantial changes in any given month,” House said.

Other transportation costs are in flux

New vehicles are up 5.8% over the past 12 months ending Jan. 30, and up 0.2% for the month.
However, used cars and trucks, a category that surged during record high inflation, are now down 11.6% for the past 12 months and down 1.9% for January.
Other transportation categories that were up over the last 12 months include airfares, which climbed 25.6%; motor vehicle repairs, which rose 23.1%; public transportation including airfares, up 17.1%; and motor vehicle insurance, up 14.7%.

Car insurance has been increasing as insurance companies reprice policies to reflect higher prices for parts, noted Nikolai Roussanov, a finance professor at the Wharton School at the University of Pennsylvania.
Other trends, like rising vehicle costs, higher accident rates during the pandemic and poorer returns on premiums invested in the market by insurance companies, may also be factors, according to Peter C. Earle, an economist at the American Institute for Economic Research.
However, there were some signs higher prices in certain categories may be subsiding, based on data for the month of January. Airfares were down 2.1% for the month, on a seasonally adjusted basis. Yet lodging away from home, including hotels and motels, was up 1.5%.

Persistent high inflation in services may continue to push up certain travel costs, according to House.
Strong demand for travel now that Covid-19 restrictions have lifted has also affected prices, House noted.
“People are not spending or emphasizing as much spending on goods as we’ve seen previously,” House said. “People are investing in experiences, getting out, going to cultural things, travel.”

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Craig Stowell loves what he does for a living. He gets to follow his passion and go car shopping as a profession.
Stowell owns Flying Wheels, a car dealership in Danville, New Hampshire. The business, which is valued at an estimated $3 million, buys about 80% of its cars at auctions around the country. For him, it’s retail therapy.

“I never know what I’m going to come home with and that’s half the thrill, half the fun,” he said.
In 2022, the U.S. vehicle auction market was valued at $3.21 billion. More than 9 million cars are sold at auctions around the U.S. every year, according to the National Auto Auction Association.
Flying Wheels reached nearly $1.3 million in sales last year. A typical month brings in about $120,000 in sales. Many of those sales come from Stowell’s online followers on YouTube and other social media.
Stowell has purchased as many as 10 vehicles at a single auction, a personal record, but there are days he walks away empty-handed. He says he has lost thousands of dollars making silly mistakes that taught him lessons for the future.
Watch this video to learn how Stowell built his $3 million business buying cars at auctions.

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