On June 13, 2025, Israel launched a surprise military operation against Iran, striking nuclear facilities and killing top Iranian officials. The move, known as Operation Rising Lion, came just days before a planned U.S.–Iran nuclear negotiation in Oman. This led many to believe Israel acted to disrupt the talks.

Targets included key sites like Natanz (a major nuclear enrichment hub) and missile development centers. Explosions lit up Tehran. Prime Minister Netanyahu confirmed the strikes, vowing continued action against Iran’s nuclear program.

Iran’s Response — Lots of Noise, Little Impact

Iran responded by sending around 100 drones toward Israel. But nearly all were intercepted by Israeli air defenses — with help from regional neighbors like Jordan and Saudi Arabia.

Despite aggressive rhetoric and calls this a “declaration of war,” Iran’s retaliation has so far been contained to drones and threats. Thankfully, no radiation leaks or mass civilian casualties have been reported. Talks, however, are now suspended.

Global Fallout and Market Reaction

World powers condemned the attack, while the U.S. walked a fine line: not involved, but reportedly aware of the plan in advance.

Markets didn’t take it well:

• Oil jumped 7–8% on supply fears
• Gold soared past $3,440 as a safe haven
• Stock futures dropped 1.5–2% overnight
• Flights rerouted across the Middle East as airspace closed

Why I’m Seeing Green in a Sea of Red

This isn’t the first time markets panicked over war headlines. Historically, they snap back quickly — because the fundamentals of strong businesses don’t change due to far-off geopolitical noise.

Companies like Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), and NVIDIA (NVDA) aren’t tied to oil, missiles, or drone strikes. But their stock prices are being pulled down anyway — and that’s an opening for investors.

These are businesses with moats, cash flows, and long runways. When their prices fall for reasons unrelated to their actual performance, that’s a gift.

Final Word: Fear Creates Opportunity

Yes, the headlines are loud. But wars tend to be short-lived market shocks. Unless you believe this will spiral into something far bigger — and permanent — history says to stay the course.

I’m not buying oil stocks. I’m not buying gold. I’m buying high-quality companies while others panic.

Because the market always recovers — and the best returns go to those who stayed calm while others ran for the exits.

Panic is temporary. Compounding is forever.

Let’s walk through the familiar storyline that has repeated itself for decades, if not centuries. Understanding this cycle is one of the most important lessons any investor can learn early on.

Act 1: A Big Macro Event Shakes the Stage

It always begins with a macroeconomic event—something big enough to grab the world’s attention. It might be a sharp rise in interest rates, a sudden geopolitical conflict, a pandemic, a banking crisis, or runaway inflation. The exact event changes from one cycle to the next, but its effect is always the same: uncertainty.

And if there’s one thing the market dislikes, it’s uncertainty.

Act 2: Panic Sets In

As the event unfolds, markets react swiftly—and often dramatically. Stock prices fall, news outlets amplify fear, and experts on TV warn of long-term economic damage. Social media feeds fill up with negativity. Panic spreads fast, especially among new investors who haven’t seen this cycle before.

You’ll hear phrases like “this time it’s different” or “this could be the end of the system.” These words aren’t new—they’re part of the script. They’ve been repeated in every crisis, from the Great Depression to the 2008 financial meltdown, to COVID-19.

Act 3: The Moment of Hesitation

Oddly enough, many people who previously said, “I wish the market would drop so I could buy cheap” suddenly go quiet. Now that prices are lower, they hesitate. Why? Because fear is louder than logic. It’s emotionally harder to buy when the world feels uncertain—even if the prices are more attractive than ever.

Act 4: The Rebound

Eventually, things begin to stabilize. The economy adjusts. Businesses adapt. People return to work. Maybe inflation cools or interest rates pause. As the dust settles, investors realize the sky isn’t falling after all.

The market starts to recover. Slowly at first, then more confidently. Prices rise, optimism returns, and the very stocks that were avoided during the panic start hitting new highs.

Act 5: “Now It’s Too Expensive”

As the market climbs higher, a new emotion takes the stage: regret. The same people who stayed on the sidelines now say, “It’s too expensive to buy.” They wish they had acted when prices were low—but back then, they were too scared.

Now they’re too cautious. And so, they wait for the next crash to finally make their move… only to repeat the same behavior.

Act 6: The Cycle Repeats

Then a new macro event shows up. The cast changes, the headlines change, but the script stays the same. Uncertainty → Panic → Hesitation → Recovery → Regret → Repeat. It’s the timeless rhythm of the market.

What Can You Learn From This?

If you’re a new investor, this pattern is your most powerful teacher. It shows that the greatest risk isn’t the market itself—it’s how we react to it.

Smart investing isn’t about predicting the next crisis or the next boom. It’s about staying calm, thinking long-term, and recognizing that emotion is the enemy of discipline. The investors who succeed over decades are the ones who trust the process, even when the story gets dramatic.

So next time you hear people shouting “It’s different this time,” take a deep breath. Remind yourself that you’ve seen this movie before—or at least, now you know how it usually plays out.

And instead of panicking, consider this: Every dip is an opportunity in disguise. Every recovery is proof of resilience. And every new crisis? Just the beginning of the next cycle.

March 28, 2025 – The market took a hit today, with indices showing a significant drop, leaving many investors wondering why. While it can be tempting to react to daily market fluctuations, it’s important to remember one fundamental truth: the stock market is not the economy. Today’s downturn is just one chapter in the market’s ongoing story, and it shouldn’t shake your long-term strategy.

The Personal Consumption Expenditures (PCE) Price Index report released today indicates that inflation remains a concern, with the core PCE index rising 2.8% year-over-year in February. This measure, which excludes volatile food and energy prices, surpassed many economists’ expectations. Consumer spending showed a modest increase of 0.4% in February, driven by durable goods purchases. However, when adjusted for inflation, the real spending growth was only 0.1%.

Financial markets reacted negatively to the report, with the Dow Jones falling nearly 700 points, the S&P 500 decreasing by 2%, and the Nasdaq Composite declining by 2.7% due to concerns about persistent inflation and the impact of recent tariffs. Additionally, consumer confidence has declined, with the University of Michigan’s sentiment index dropping to 57.0 in March from 64.7 in February, marking the lowest level in two years. These developments suggest that the economy is facing stagflation—a combination of slow growth and rising inflation—which may influence the Federal Reserve’s monetary policy decisions in the coming months.

The Market is Not the Economy

While the market and the economy are interconnected, they are not the same thing. The stock market is a reflection of investor sentiment and behavior—it’s essentially a marketplace where people buy and sell shares in companies based on their perceptions of the future.

The economy, on the other hand, is the larger system that includes production, consumption, and the exchange of goods and services. It’s driven by factors like consumer spending, business investment, government policies, and technological progress. While the stock market can sometimes serve as a leading indicator of economic conditions, it can also be volatile and influenced by factors unrelated to the economy.

In other words, a dip in the market today doesn’t necessarily mean the economy is in trouble. In fact, the market could be reflecting an overreaction to short-term news or fear. Meanwhile, the economy could still be moving along steadily, with businesses continuing to innovate and generate profits.

The Importance of Patience for Long-Term Investors

If you’re a long-term investor, it’s important to stay patient and calm during market fluctuations. While short-term market movements can be unnerving, the reality is that the market will recover—as it has done time and time again. Great companies, those with solid business models and strong fundamentals, will continue to grow over time, regardless of short-term setbacks.

Here’s why holding through thick and thin is the best strategy for long-term investors:

1. The Market Goes Through Cycles
   The stock market is cyclical. It goes up and down, sometimes dramatically, but over the long term, it has always trended upwards. Whether it’s a market correction, a temporary dip, or a larger bear market, these cycles are a natural part of investing. What matters most is not how the market performs in the short term, but how strong companies perform over the long term.
2. Great Companies Will Continue to Grow
   When you invest in strong, high-quality companies, you’re investing in businesses with a proven ability to weather storms. These companies have strong leadership, competitive advantages, and sustainable growth. In times of uncertainty, they might see temporary setbacks, but over time, their performance will shine through, and they will deliver returns for patient investors.
3. You Don’t Need to Time the Market
   One of the biggest mistakes investors can make is trying to time the market—buying low and selling high based on short-term fluctuations. It’s impossible to predict the precise movements of the market. By holding onto great companies and riding out the inevitable ups and downs, you avoid making costly mistakes and are more likely to see your investments grow over the long term.

Missing Just a Few of the Best Days Can Cost You

Many investors panic and sell during downturns, thinking they can jump back in when the market starts to recover. However, studies have shown that missing just the 10 best days of market performance over a long period can significantly hurt your returns. For example, if you missed the 10 best up days over the last 20 years, your returns could be cut in half. The market’s best days often follow the worst days, meaning trying to time the market can cost you dearly.

This is why it’s crucial to stay invested and not make rash decisions based on short-term market moves.

Why You Will Be Rewarded in the Long Run

Long-term investing is like planting a tree. At first, it may seem like little is happening, but over time, that tree grows stronger and taller, eventually providing significant rewards. Similarly, your investments in high-quality companies will gradually build wealth over time. The patience you develop now will pay off handsomely in the future.

So, even though today’s market drop might feel unsettling, don’t let it deter you. It’s a temporary setback, and in the grand scheme of things, it’s just a blip on the radar. Stay focused on your long-term strategy, and continue to hold great companies that you believe in. History has shown that markets eventually rise again, and so do the great companies within them.

Conclusion

The stock market’s performance today doesn’t define the future of your investments. It’s important to recognize that the market will go up and down, but if you’ve done the work to invest in solid, growth-oriented companies, the long-term outlook remains positive. Develop the patience to hold through the volatility, and you will likely be rewarded in the years to come.

Remember, the market is not the economy, and short-term fluctuations are normal. As a long-term investor, your goal is to stay focused on your strategy, trust in the fundamentals of your holdings, and allow time to work its magic. By doing so, you’ll be well-positioned to reap the benefits when the market recovers and moves higher once again. Keep holding, and the rewards will come.

Stay confident, stay patient, and keep investing wisely. The best is yet to come.

The AI Chip Demand Remains Strong

Meta CEO Mark Zuckerberg weighed in on the Deepseek debate, stating that it’s still too early to assess the full implications of more affordable AI models. What’s clear, though, is that Meta is not pulling back on AI investments. The company is maintaining its $60 billion to $65 billion spending forecast for 2025, with a significant portion dedicated to AI infrastructure, including GPUs from Nvidia.

Microsoft, another major AI player, is also staying the course, expecting to spend $30 billion in capital expenditures over the next two quarters as it integrates AI across its products. Notably, Deepseek is even available on Microsoft’s Azure platform—further embedding Nvidia’s chips into the AI ecosystem.

Meanwhile, ASML (ASML), the leader in advanced chipmaking equipment, sees Deepseek’s cost-efficiency as an opportunity rather than a threat. ASML CEO Christophe Fouquet pointed out that lowering the cost of AI models will drive more AI applications, which in turn increases the demand for chips. Simply put, more AI models mean more chips are needed, not fewer.

Why the Market Overreacted

Despite the continued bullish outlook for AI chips, NVDA and AMD stocks took a hit following the Deepseek news. The reasons?

• Profit-taking: Nvidia’s stock had seen a massive rally, and any news in the AI space was an excuse for traders to lock in gains.
• Fears of AI model efficiency reducing GPU demand: Some investors speculated that cheaper AI models might require less computing power. But this overlooks the reality that large-scale AI infrastructure still needs powerful GPUs.
• Concerns over China developing its own AI chips: While this is a long-term risk, Nvidia remains the dominant player in high-end AI chip technology today.

Deepseek Expands the Market—It Doesn’t Shrink It

Deepseek is not replacing AI infrastructure—it’s expanding it. The open-source nature of Deepseek allows more companies to build AI applications, which in turn requires more GPUs to train and deploy models.

This follows the classic tech adoption curve: as AI models become more efficient and accessible, demand for AI-powered applications explodes. That means more chips, more data centers, and more AI-driven services.

The Big Picture: The US and China’s AI Race

Manufacturing is not a big part of the US economy. But China could be coming for US tech now. Deepseek’s advances show that China’s technological progression is a serious challenge to US technology companies. This matters because tech is an increasingly crucial industry for the US—both in terms of economic output and stock market concentration. Stock market gains have also bolstered household balance sheets, making tech’s stability even more critical.

However, US companies are far from out of the game. As mentioned earlier, having more chips is always better than fewer. The closed nature of US AI companies means we may not yet know the full extent of their AI advances. OpenAI and Google could have even more powerful models in the works that remain undisclosed to the public.

Famed venture capitalist Marc Andreessen recently called Deepseek-R1 AI’s Sputnik moment. But the analogy may not hold. When the Soviet Union launched Sputnik in 1957, the US was behind. Yet, within a year, America responded with Explorer 1 in 1958. This time, however, it’s China that appears to have caught up.

Right now, the focus is on winners and losers in the wake of Deepseek’s release. That’s a difficult game to play, and ultimately, the market will sort it out. The bigger takeaway is that AI is now set to diffuse into the economy at a faster pace, thanks to lower costs. This means US companies are likely to ramp up AI investments even further. That means one company’s spending is another’s revenue and profit.

The Bottom Line

Deepseek’s rise isn’t a headwind for Nvidia, AMD, or AI chipmakers—it’s a tailwind. The AI race is far from over, and infrastructure spending remains at historic highs. While short-term stock volatility may shake the market, the fundamental demand for high-performance AI chips remains stronger than ever. Nvidia and AMD aren’t losing the AI war—they’re still supplying the weapons.

A significant increase in capital expenditures could lead to future challenges, but for now, the AI revolution is accelerating, and the US is still firmly in the race.

In this guide, we’ll explain how brokers, market makers, and exchanges work together, how PFOF operates, and how your market or limit order plays a role.

The Role of Brokers:

Brokers like Schwab and IBKR are the intermediaries between you and the stock market. When you place an order to buy or sell shares, your broker sends the order for execution to get you the best price.

In the past, brokers charged commissions for each trade. For example, when I started investing decades ago, TDAmeritrade’s commission was $25 per trade. But today, most brokers have eliminated commissions, and they now earn revenue from PFOF instead of charging you directly.

What is a Market Maker?

Market makers are financial firms that provide liquidity by constantly being ready to buy or sell stocks. They quote both buy (bid) and sell (ask) prices, and their profit comes from the small difference between these prices—called the bid-ask spread.

Market makers use the spread to their advantage. If you place a market order (to buy or sell immediately), the market maker may buy the stock from someone else at a lower price and sell it to you at a higher price, pocketing the difference. Similarly, for limit orders, they may buy the stock below your target price and sell it to you at the price you’ve set.

How Payment for Order Flow (PFOF) Works?

When you place an order with your broker, it doesn’t always go directly to a stock exchange like the NYSE or Nasdaq. Instead, the broker often routes the order to a market maker first. In exchange for this order flow, the market maker pays the broker a small fee—this is PFOF.

For example, if you buy 100 shares of stock, your broker might route the order to a market maker, who pays them a small amount (fractions of a penny per share). Once the market maker executes the trade, it’s sent to the exchange to finalize the transaction.

The Role of Exchange Fees:

While brokers and market makers earn through PFOF and spreads, stock exchanges (like NYSE and Nasdaq) charge exchange fees for executing the trades. Although you’re not paying a commission to the broker, investors still pay fractions of a penny in exchange fees, which the broker collects and passes on to the exchange.

How Your Orders Work (Market vs. Limit Orders)?

Market Orders A market order tells the broker to buy or sell immediately at the current price. When you place a market order, the broker sends it to a market maker, who fills the order at the best available price. The market maker may buy the stock at a lower price and sell it to you at a slightly higher price, keeping the difference (the spread) as profit. They then pay your broker a PFOF fee for routing the order to them.

Limit Orders A limit order allows you to specify the price you’re willing to pay for a stock (if buying) or the minimum you’ll accept (if selling). For instance, if you place a limit order to buy at $50, the market maker might buy the stock at $49.90 and sell it to you at $50, profiting from the $0.10 spread. Even with limit orders, the market maker pays your broker a PFOF fee for handling the order.

How Brokers Make Money Without Commissions?

PFOF allows brokers to make money from market makers, while investors still cover exchange fees (fractions of a penny per trade) when the order is executed at the exchange. Market makers profit from the spread by buying low and selling at the price you’ve set, and they share a small part of that profit with your broker. This system lets brokers offer you commission-free trading, while market makers and exchanges still earn their share.

Conclusion

Even though brokers like Schwab and IBKR don’t charge commissions, they still make money through PFOF. By routing your orders to market makers, brokers earn small fees, while the market makers profit from buying low and selling at the price you’re willing to pay. While you’re not paying a direct commission, there are still exchange fees involved in each trade. Ultimately, your order is finalized at an exchange like NYSE or Nasdaq, ensuring that all parties—including brokers, market makers, and exchanges—benefit from the transaction, even when it’s commission-free for you.

Investing is a powerful tool for building wealth, securing financial independence, and achieving long-term goals. Yet, the process of investing can feel overwhelming for beginners and seasoned investors alike. The stock market is a dynamic, ever-changing environment that tests not only our financial acumen but also our emotional discipline.

This guide is designed to simplify the complexities of investing while providing actionable strategies for success. Whether you’re just starting out or looking to refine your approach, this resource offers a step-by-step framework to help you navigate the financial markets with confidence. From selecting high-quality companies to understanding market dynamics and mastering investor psychology, each chapter focuses on a crucial aspect of successful investing.

What is a Stock?

At its core, a stock represents a share of ownership in a company. When you purchase a stock, you are buying a small piece of that business, making you a shareholder. As a shareholder, you participate in the company’s success—or failures—through price appreciation (or depreciation) and dividends.

Stocks allow companies to raise capital to grow their business, while investors benefit from the opportunity to grow their wealth over time. This connection between companies and investors is what makes the stock market a powerful tool for building long-term financial success.

Why Invest?

Investing is about putting your money to work so it grows over time. Unlike saving, where your money sits idle in a bank account earning minimal interest, investing allows you to leverage the power of compounding—the process where earnings generate even more earnings. The earlier you start, the greater the opportunity to achieve exponential growth.

Successful investing isn’t about luck or timing; it’s about discipline, patience, and informed decision-making. By focusing on long-term strategies and avoiding the pitfalls of speculation, you can create a portfolio that aligns with your financial objectives and withstands the inevitable ups and downs of the market.

What to Expect From This Guide

This guide is structured into three core sections to provide a comprehensive understanding of investing:

The Principles of Investing
– Learn the foundational rules of investing, including how to identify high-quality companies, avoid unnecessary risks, and build a diversified portfolio. These principles are the building blocks of successful investing and will serve as your compass throughout your financial journey.

Understanding the Stock Market
– Gain insight into how the stock market operates and why it often behaves unpredictably. This section will demystify common misconceptions, explain the importance of market corrections, and show you how to turn downturns into opportunities.

Mastering Investor Psychology
– Discover the psychological traps that derail even the most experienced investors. Learn how to stay calm during market downturns, avoid chasing trends, and focus on long-term goals. This chapter emphasizes the importance of emotional discipline, which is just as critical as financial knowledge.

Inspirational Guidance

Throughout this guide, you’ll find timeless wisdom from legendary investors like Warren Buffett and Benjamin Graham. These quotes are not just motivational; they encapsulate principles that have stood the test of time, offering guidance for navigating both calm and turbulent markets.

A Journey of Patience and Growth

Investing is not a sprint; it’s a marathon. It requires patience, discipline, and a willingness to learn from mistakes. While the market’s fluctuations may test your resolve, maintaining a focus on fundamentals and long-term goals will ultimately lead to success.

As you embark on this journey, remember: the stock market rewards those who are informed, prepared, and patient. By following the strategies outlined in this guide, you’ll be well-equipped to make sound investment decisions and achieve your financial aspirations.