AWM Financial Newsletter

Bud Light and Target show how quickly consumer backlash can cause losses, but consumers also create quieter shifts. Cable TV is one example: younger viewers often choose cheaper, lower-ad streaming over expensive bundles, helping reduce U.S. cable subscriptions from nearly 90% of households in 2010 to under 35% today. Netflix’s convenience similarly disrupted cable and movie rentals, contributing to Blockbuster’s 2010 bankruptcy. Consumers generally move to better alternatives.

Customers have power because companies depend on their spending. Target’s 2023–2025 backlash over Pride merchandise and later DEI rollbacks hurt traffic, market value, and its share price. While not every decision changed, Target still responded to pressure. Petitions and hashtags can raise awareness, but lost revenue is often what forces action.

The key is staying invested through downturns, since the U.S. economy has historically recovered within a few years. Starting early gives compounding more time to work. The challenge is not chasing extraordinary returns but staying consistent and patient. Like perennial plants, compounding rewards steady growth over time.

Compound interest lets savings grow as returns generate more returns. At a 10% annual return, $100 becomes $110 after one year, $121 after two, and more than $4,500 by year 40 without adding another dollar. Growth starts slowly, then accelerates. Stocks do not rise as steadily: recessions, wars, and crises can trigger sharp declines.

Blueberry bushes are perennials: they return each year, producing more as they mature. They illustrate compounding growth, where each season builds on the growth before it instead of starting over. The same pattern appears in technology. When Apollo 11 landed on the Moon in 1969, NASA relied on the Apollo Guidance Computer, which had just 2 kilobytes of RAM and 36 kilobytes of permanent storage.

Over the past century, the S&P 500 has averaged about 10% annual returns. Some years rise sharply, while others fall. Over long periods, however, buying and holding the index has historically delivered strong average growth. Part of its strength is that it evolves with the economy. In 1995, the largest companies were General Electric, Exxon Mobil, and AT&T; in 2026, they are Apple, Nvidia, and Microsoft. As the economy changes, so does the index.

When people say, “the market is up 30 points,” they usually mean a major index, not a sports score. For the S&P 500, that figure reflects the combined value of its 500 companies, simplified into one number. You cannot buy the index directly, but you can buy an ETF—an index fund that holds the same companies in the same proportions and trades like a stock. This gives investors an easy, low-cost way to own the market, often with a single click.

Owning shares in companies like Apple, Walmart, Coca-Cola, Netflix, or Amazon lets you benefit from their profits even if you did not build them. One simple approach is buying the S&P 500, an index of major U.S. companies. A single share provides exposure to all 500, with larger companies carrying more weight because the index is based on market value. To qualify, a company must be publicly traded, U.S.-based, profitable, and worth at least $25 billion; companies that no longer meet the standards can be removed.

FICO Score 9 helps younger borrowers with short credit histories by counting landlord-reported rent payments and treating unpaid medical debt more leniently. Checking your own score does not hurt your rating, and tools like myFICO can help you monitor progress and spot fraud. Because insurers and utilities may also review FICO scores, your credit profile can affect costs for housing, transportation, education, and other major needs.

Credit mix and new credit each count for 10% of your score. A varied mix shows you can manage different debts, but you do not need every loan type. Opening many accounts quickly can seem risky; checking your own credit does not hurt your score. Scores above 670 are above average, and scores over 740 often qualify for top rates. Because many issuers, including Discover, still use FICO Score 8, knowing the lender’s model matters.