U.S. stocks reacted to news of a ceasefire deal between the U.S. and Iran by exploding to their best single day since last April. On Wednesday, the Dow Jones Industrial Average added more than 1,300 points, and the S&P 500 and Nasdaq both gained more than 2.5% for the day. The surge comes after weeks of volatility and steady declines in the market since the U.S. launched the war in Iran.
As for what happens next, it all depends on whether the ceasefire holds and if it leads to a permanent end to the war. But KTRH Money Man Pat Shinn recommends staying the course with your investments and not reacting to short-term volatility. "I see headlines in some financial outlets talking about recession or that sort of thing, that's nowhere on the horizon," says Shinn. "In fact, we're seeing earnings estimates going up right now. The fundamentals of the market are not only good, they're getting better."
Indeed, the Dow is only two months removed from its all-time high, and the long-term trend remains positive despite the losses of the past month. "This year to date, the stock market is down just one percent," says Shinn. "Over the past six months, it's up over ten percent, and over the past year it's up roughly 25 percent."
Shinn's advice is to keep your eyes on the big picture and never make investment decisions based on one volatile day or volatile period. "I had clients calling yesterday saying I must be so busy (because of the market surge)," he tells KTRH. "And the truth is we didn't make a single trade yesterday."
"What the market does in a single day should not affect your investments. It doesn't ours."
Photo: Moment RF