Financial literacy matters even more in uncertain times

Have the ongoing ups and downs of the markets caused you some concern? Here's one way for New Mexicans to gain a bit more confidence: Sharpen your financial knowledge and skills.

Understandably, national headlines around market fluctuations and their perceived implications on long-term financial goals can trigger a lot of stress, especially if you are one of the nearly 20% of New Mexico residents whom the U.S. Census Bureau, as of 2023, has counted as approaching retirement age, or planning retirement. In fact, New Mexico is ranked as 13th in the nation for the percentage of our population who are 65 and older.

While volatility affects each aspect of financial planning — from wealth management, to budgeting, debt and credit — market fluctuation is just one of many uncertainties that may lead to confusion about how to manage your financial future. No matter what life stage you’re in, there are simple steps you can take to increase your financial literacy and help smooth your path to financial stability and growth potential.

Understanding market volatility as part of the journey

The first step in improving financial literacy is to understand that market fluctuations are a normal part of investing. History provides valuable perspective: U.S. stocks have experienced three downturns of 5% per year, one correction of 10% per year and one correction of approximately 15% every three years, according to trusted financial data providers cited in a 2025 Fidelity data report.

While these fluctuations can feel unsettling in the moment, the market has consistently recovered and delivered long-term gains over time.

“Maintaining a long-term perspective helps you see beyond immediate turbulence,” said Travis Haguewood, Albuquerque-based CFP®, vice president, financial consultant at Fidelity Investments. “Looking at the ‘big picture’ allows confident investors to view these cyclical ebbs and flows as natural parts of the journey toward your retirement goals.”

During times of uncertainty, understanding market fundamentals, maintaining consistency in your savings and seeking professional guidance when needed, can help you build the financial resilience to thrive long-term.

The power of consistency during turbulent times

For example, despite market volatility during the first quarter of 2025, a 2025 in-house analysis shows Fidelity retirement savers remained remarkably steady with their contribution rates and asset allocation, and subsequently saw 401(k) savings rates reach a record high of 14.3% — the closest it’s ever been to Fidelity's suggested savings rate of 15%. (This amount includes employee and employer contributions.)

“Consistency wins over market timing,” continued Haguewood. “Rather than adjusting your 401(k) contributions against every market fluctuation, we see that disciplined holders who maintain regular contributions often come out ahead.”

Building your financial foundation

Beyond market considerations, genuine financial resilience requires a comprehensive approach to money management. Establishing an emergency fund that can serve as a safety net may help you avoid the pressure to liquidate investments during inopportune times. Set a goal to save $1,000, then aim to save three to six months’ worth of essential expenses by funding your emergency savings, prioritizing these allocations the same way you would a utility bill or car payment, according to guidance from Fidelity’s financial planning professionals earlier this year. This cushion provides flexibility to weather unexpected expenses without derailing your long-term financial goals.

Debt management is equally crucial. By actively managing your debt obligations, you create more flexibility to adjust for inflation, interest rate changes and employment uncertainty. This breathing room will help you maintain your investment strategy even when other aspects of your financial life face pressure.

The value of knowledge and professional guidance

“People make better decisions – in life and with their finances – when they are armed with reliable and helpful information,” said Haguewood. “Understanding fundamental concepts like inflation, interest rates, and how stock and bond markets function helps you avoid impulsive decisions based on fear or market noise.”

A qualified professional can help you establish a comprehensive financial plan, assess your progress, and guide you through necessary adjustments as your circumstances or market conditions change. Free tools and resources are available at Fidelity.com.

The tools and resources offered by Fidelity can better equip investors for the road ahead, regardless of the economic weather of the day. Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.

**Past performance is no guarantee of future results.**

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.

The CERTIFIED FINANCIAL PLANNER certification, which is also referred to as a CFP® certification, is offered by the Certified Financial Planner Board of Standards Inc. ("CFP Board"). To obtain the CFP® certification, candidates must pass the comprehensive CFP Certification examination, pass the CFP® Board's fitness standards for candidates and registrants, agree to abide by the CFP Board's Code of Ethics and Professional Responsibility, and have at least three years of qualifying work experience, among other requirements. The CFP Board owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER in the U.S. This information is intended to be educational and is not tailored to the investment needs of any specific investor.

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