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Market Wrap
U.S. stock markets experienced a strong rally on Monday, March 24, 2025, as investor sentiment improved on hopes of more targeted tariffs and positive economic data, helping offset recent concerns about growth and trade disruptions.
Targeted Tariff Relief:
Reports suggested that the Trump administration may pursue a narrower, more strategic approach to upcoming tariffs rather than a blanket implementation. This shift eased fears of a broad trade war and lifted market sentiment, particularly among exporters and manufacturing firms.
Mixed Economic Data:
The S&P Global U.S. Services PMI rose to 54.3, reflecting solid expansion in the services sector. However, the Manufacturing PMI fell to 49.8, indicating contraction. The mixed signals showed underlying strength in consumer demand but persistent stress in industrial activity.
Tech-Led Market Gains:
Technology stocks led the rally, buoyed by renewed optimism around AI and semiconductor demand. Names like Tesla, Nvidia, and AMD saw substantial gains, helping push the broader indices higher.
Bond Yields Rise:
As risk appetite returned, investors moved out of safe-haven assets. U.S. Treasury yields climbed, with the 10-year yield rising sharply, reflecting reduced demand for defensive positioning.
Oil Prices Edge Higher:
Crude oil prices rose following new U.S. tariffs on Venezuelan energy exports. The move raised concerns about tighter supply, supporting oil markets despite broader macroeconomic uncertainty.
Tesla Inc. shares surged 11.9%. This marks the fourth consecutive day of gains for Tesla, driven by optimism that the Trump administration might adopt a more measured approach to new tariffs, as well as anticipation surrounding the company's plans to roll out its Full Self-Driving technology in China. Despite the recent uptick, Tesla's stock remains 43.0% below its 52-week high of $488.54, reached on December 18th.
Advanced Micro Devices Inc. shares climbed 7.0%,. This performance surpassed the overall positive market trends and was bolstered by news that China's Ant Group might use AMD's chips for AI models, enhancing the company's growth prospects in the AI sector.
Lockheed Martin Corporation shares continued to drop after losing a major defense contract to Boeing. The loss prompted a downgrade by Bank of America, reflecting apprehensions about Lockheed's future revenue streams and competitive positioning.
Nucor Corporation shares rose following an upgrade by UBS, which cited tariff protections as a potential benefit to the steel industry. The upgrade reflects expectations that domestic steel producers like Nucor could gain a competitive edge due to reduced competition from imports.
United Airlines Holdings Inc. shares rose 7% after the airline raised fees and enhanced benefits for its rewards credit cards. This move is expected to boost the company's ancillary revenue and strengthen customer loyalty programs.
Super Micro Computer Inc. shares declined after a Goldman Sachs downgrade, citing increased competition in the AI server market. The downgrade reflects concerns about Super Micro's ability to maintain its market share amidst intensifying industry rivalry.
The AZEK Company Inc. shares jumped significantly after announcing its acquisition by Australia's James Hardie Industries for $8.75 billion. This strategic move is expected to enhance AZEK's market reach and operational capabilities, leading to increased investor enthusiasm.