5 Timeless Warren Buffett Quotes to Understand Today's Market Trends

I wanted to share some thoughts on recent market developments and their implications for your financial strategy. This comes during a particularly noteworthy period of policy shifts and market adjustments.

The following observations draw inspiration from Warren Buffett, who recently stepped down as CEO of Berkshire Hathaway at 94 years old. Throughout his remarkable career, he has embodied many investment principles we've discussed together: patience, discipline, and long-term thinking. As Buffett himself noted, "The stock market is a device for transferring money from the impatient to the patient."

The most important point is that well-diversified portfolios have demonstrated remarkable resilience despite the challenging market conditions we've recently faced. We continue to have strong confidence in the long-term outlook.

I hope you find this timely update valuable. Please reach out if you need any assistance during this period.

Market Developments Simplified

To help you navigate through the complexity, I've distilled the essential developments below. My aim is to provide context for recent headlines and highlight what truly matters for long-term investors, illustrated with recent Buffett quotes for each topic.

• Current Investment Landscape

"This period has been... really nothing. This is not a very dramatic bear market or anything of the sort." - Warren Buffett at Berkshire Hathaway 2025 Annual Meeting, May 3, 2025.

April brought significant developments, beginning with the April 2 tariff announcement and concluding with economic deceleration. Nevertheless, you might be encouraged to learn that diversified portfolios generally maintained stability throughout this period.

• Navigating Market Volatility

"If it makes a difference to you whether your stocks are down 15% or not, you need to get a somewhat different investment philosophy." - 2025 Annual Meeting, May 3, 2025.

Recent headlines have highlighted unusual volatility in both stock and bond markets. The S&P 500, for instance, experienced a decline of up to 12% in April before quickly recovering. Our balanced approach to managing risk and opportunity proves particularly valuable in environments like the current one.

• Economic Indicators

"This system is called capitalism. It has its faults and abuses – in certain respects more egregious now than ever – but it also can work wonders unmatched by other economic systems." - Berkshire Annual Shareholder Letter, Feb 22, 2025

Early 2025 economic data presents a mixed picture, with some concerning indicators alongside areas of strength. Investors are particularly focused on whether tariffs will increase inflation while reducing growth. Recent reports indicate the economy contracted slightly (0.3%) in Q1 2025—the first decline since early 2022—primarily due to businesses stockpiling imported goods ahead of tariff implementation. While structural challenges exist, the long-term economic trajectory remains likely positive.

• International Trade Relations

"The United States has changed since I was born in 1930. We've gone through all kinds of things, and we've gone through great recessions, we've gone through World Wars. We've gone through the development of an atomic bomb that we never dreamt of [at the] time I was born. So I would not get discouraged." - 2025 Annual Meeting, May 3, 2025.

Trade tensions will likely remain an ongoing concern. Policy negotiations continue to evolve, though the 90-day pause with most countries suggests extreme scenarios may be less probable. From an investment perspective, we must consider various potential outcomes, with China relations representing a persistent challenge. While progress on tariff discussions is positive, maintaining a portfolio prepared for different scenarios remains essential.

• Current Portfolio Strategy

"The one problem with the investment business is that things don't come along in an orderly fashion and they never will." - 2025 Annual Meeting, May 3, 2025.

Our portfolio approach has proven effective through its balanced mix of defensive and growth-oriented assets. Market unpredictability is expected, and straight-line movements are never anticipated. Notably, international investments have performed well, while bonds have provided portfolio support with relatively attractive yields. This strategy reflects your risk tolerance and aligns with your long-term financial objectives.

Embracing the Long View

One investment principle remains fundamental amid recent volatility: historically, maintaining market exposure through challenging periods has been crucial for long-term financial success.

That said, months like April are relatively uncommon. While heightened volatility can be unsettling, these periods underscore the importance of focusing on your financial plan, portfolio construction, and potential opportunities. This means making adjustments when necessary to avoid undesirable risk, while maintaining discipline and appropriate diversification for your specific circumstances.

While the future inevitably holds uncertainties, positive scenarios also exist. Without perfect foresight, our most effective approach balances risk and opportunity through diversification and risk management strategies designed to support your portfolio through historic market movements like those experienced in April.

I remain available to discuss how these developments might specifically impact your financial situation and objectives.

Best regards,

Todd J. Pouliot, AIF

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