CNBC’s Jim Cramer said Monday that investors following the market’s reaction to Venezuela’s political upheaval are making the common mistake of confusing short-term trading opportunities with long-term investments.
Cramer urged investors to focus on owning and holding onto blue-chip stocks, rather than jumping into trades whose valuations can fluctuate with every headline.
“You want to hold individual stocks in conjunction with index funds rather than trading them,” Cramer said. “Unleash the power of compound interest.”
Kramer’s comments came amid a widespread market rally. The Dow Jones Industrial Average rose 594.79 points (1.23%) to a new all-time high.
But Kramer cautioned that geopolitical talk doesn’t necessarily translate into lasting business opportunities. Although President Donald Trump’s move to oust Venezuela’s leader has sparked speculation around oil and energy stocks, Cramer said much of the upside is already priced in.
He pointed to companies such as chevronU.S. refiners, etc. Valeroand oil service companies. halliburton It’s an example of a stock that has soared on speculation, even though rebuilding Venezuela’s oil industry could take years and require huge investments.
Kramer noted that meaningful results are likely to be fully realized in years rather than days, and that investors often underestimate how long it takes for political changes to show up in corporate profits.
Instead, Cramer said investors should focus on areas of the market where valuations still offer protection even if stock prices decline.
Mr Kramer said goldman sachs stands to benefit from increased mergers, acquisitions and equity issuance. He also pointed out that: citygrouphe believes it has the potential to continue beating profit expectations. capital oneAfter acquiring Discover, he called it one of the cheapest major banks on the market.
