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Market Turn: Looking at economic headlines can feel like a rollercoaster day to day. And right now, it can feel a little doom and gloom. While there has been a downturn in the global equity markets, we want to offer some historical data for some healthy perspective. Our own Josh Manifold says it this way: “A market drawdown is a healthy, normal part of a market cycle.” In the chart below, you’ll see the red dots indicating the drawdowns and the lines indicating the intra year corrections. Data shows that the market sees double-digit drawdowns in two-thirds of all years. Yet when there has been a correction of 10% or worse, three out of every five years have ended with a positive return. Stock market corrections are perfectly normal. That said, we are always available to talk through your investments and thoughts in the midst of uncertainty. Please don’t hesitate to connect with us if you have any questions or concerns in this environment.

5 Lessons to Teach Your Kids: We know we should teach our kids about money, but sometimes it’s hard to know where to start or where to focus your attention. So here are five suggested lessons to teach your kids:

  1. Money is Earned, Not Given—one idea is to tie an allowance to chores rather than just providing cash.
  2. Develop a Savings Plan—if using cash, sometimes using clear jars with smaller children can help them see their money grow. Also, repetition is the key here. Consider instructing them how much to save with every cash gift or earning they get.
  3. Create Goals Around Spending Money—here you can consider the concept of money management and setting goals for things they really want. The goal? Spending money has an impact on their decision-making process.
  4. Why Good Credit Matters—this is the “pay your bills on time” part of the lessons. And the importance of not overextending themselves (aka, living beyond their means).
  5. Be Content with What You Can Afford—advertising, marketing, and peer pressure are at work to create a need for the latest and greatest item. Teaching your kid(s) lessons about the value of money and the differences between necessities and luxuries will go a long way.

And for the Adults: It’s sometimes easy to forget the basic principles we are teaching our kids. Here are four quick suggestions to consider as an adult for fighting against the incessant marketing and drive for the latest and greatest:

  1. Unsubscribe—email marketing is incredibly effective and sneaky. If you don’t need it, unsubscribe!
  2. Think critically—rather than observing an advertisement, think about it critically. What are they trying to sell? How are they trying to convince me?
  3. Review—looking back at old purchases can help us determine which ones were worthwhile.
  4. Ask Questions—what am I paying for? Do I really need it? Is the item worth the cost?

Economic Headlines:

  • Apple Reports Record Quarter: Last week, Apple reported record quarterly revenue and profit despite supply chain problems. The iPhone maker said revenue reached $123.9 billion in the last three months of 2021, and profit hit $34.6 billion. CEO Tim Cook stated that supply chain constraints are expected to ease in the current quarter though not sure as to when. (Wall Street Journal)
  • Judge Cancels Biden Administration’s Offshore Oil and Gas Leases: A federal judge last week invalidated a massive offshore oil and gas lease in the Gulf of Mexico. The ruling was that the Biden administration violated federal rules by relying on analysis that didn’t fully take into consideration how the leases would affect the climate. In his first days in office, Biden issued an executive order pausing all new oil and gas drilling permits. Thirteen states filed a lawsuit. In response, the Biden administration offered 80 million acres for lease. Environmental groups sued. (CNNFOX Business)
  • Lowe’s and Petco: One side effect of the pandemic was an uptick in home projects, gardening, and … pet ownership. Rising inflation is making customers warier of spending, but the two companies—Lowe’s and Petco—are hoping to get a boost by offering one-stop shopping. Lowe’s plans to open mini-Petco shops inside 15 of its stores. These mini-shops will offer dog food, cat food, and pet supplies, as well as some grooming and veterinary services—one-stop shopping in some respects.

Wordle Fever: Have you caught the Wordle bug? This free online word game has become a must-play trend in the past few weeks. You have six attempts to guess a five-letter word. Only one Wordle is released a day, and it’s the same word for everyone worldwide. There are no advertisements or notifications—the charm is in its simplicity. There may be some at the Compass Ion offices that are daily participants! Let us know how you do. So far, we have a 2-guess record.