Tariff Downturn | Perspective Needed

Rational Optimism: Chairman and CEO of Berkshire Hathaway, Warren Buffett, wrote in his 2008 yearly letter:

“In the 20th century alone, we dealt with two great wars (one of which we initially appeared to be losing); a dozen or so panics and recessions; virulent inflation that led to a 21.5% prime rate in 1980; and the Great Depression of the 1930s, when unemployment ranged between 15% and 25% for many years.  America has had no shortage of challenges. Without fail, however, we’ve overcome them. In the face of those obstacles—and many others—the real standard of living for Americans improved nearly seven-fold during the 1900s, while the Dow Jones Industrials rose from 66 to 11,497.”

When it comes to investing (and a lot of areas in life, really) rational optimism is a strong benefit. Pessimism about the long-term does not align with a historic worldview. Investors can choose to believe that right now is the beginning of the end, but that is a bet against all of human history and against human nature itself. As has always been the case, progress occurs against an inevitable backdrop of catastrophe. Always has and always will. Invariably, you can always find what you are looking for, and your investment results will probably mimic that worldview.¹

¹Aptus

Stock Markets Last Week: There have been three instances worse than what we just experienced on April 3 & 4 in 75 years of data:

• October 1987 (Black Monday)
• November 2008 (Congress rejects GFC bailouts)
• March 2020 (Covid declared a pandemic by the WHO)

While there is a unique origin story for this sell off, the principles of long-term strategic asset allocation remain our guide. Investors have benefited from these for decades, and these tenets have served as a source of protection when anxiety rises. We remain focused on what matters most in seasons like this, and welcome conversation as the days unfold here in front of us. Please do not hesitate to reach out if you have specific questions about where we are together.

Podcast Recommendation: During WWII, B.F. Skinner conducted a famous pigeon psychology experiment that we find applicable to the current state of things with market volatility. Financial analyst and author Morgan Housel shares more about it here. Take 15 minutes to listen to his perspective which is much in line with our methodology.

*The views expressed represent the opinions of Compass Ion Advisors, LLC, as of the date noted and are subject to change. These views are not intended as a forecast, a guarantee of future results, investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial, or legal advice or service to any person. The information contained has been compiled from sources deemed reliable, yet accuracy is not guaranteed.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website at https://adviserinfo.sec.gov/firm/summary/166418. Past performance is not a guarantee of future results.