It’s well known that stocks are one of the foundations of long-term portfolios. When included as part of a comprehensive financial plan, stocks have historically created wealth and helped investors achieve their financial goals. However, a natural question is: what type of stocks? While investors and the media tend to focus on the stocks of the largest companies, there are many other categories that can play important roles in diversified portfolios.

Moody's recent downgrade of the U.S. credit rating marks an official end to the country’s top-tier debt status. Following Fitch's downgrade in 2023 and Standard & Poor's move in 2011, Moody's decision to lower the rating from Aaa to Aa1 underscores growing concerns about the nation's fiscal trajectory. This decision comes as Congress debates a new budget bill that could increase annual deficits, highlighting the gap between tax cuts and fiscal sustainability. Amid this debt, deficit, and political uncertainty, many investors may wonder what this means for their financial plans.

The recent trade announcement between the U.S. and China reverses many of the tariffs that rattled financial markets beginning in April. This agreement, which lasts 90 days, lowers U.S. tariff rates on China from 145% to 30%, and China’s rates on U.S. goods to 10%. Along with tariff pauses on other trading partners, and a newly announced trade deal with the U.K., markets are hopeful that a drawn-out trade war is now off the table. What does this changing market narrative mean for long-term investors?

A key principle of investing is that patience, discipline, and maintaining a long-term perspective are what drive financial success. Perhaps no investor has captured this wisdom as eloquently as Warren Buffett over his five-decade career as CEO of Berkshire Hathaway. Buffett’s recent retirement announcement is an opportunity to revisit investment principles that are not only relevant in today’s market environment, but have also stood the test of time.