When it became clear Tuesday night that Donald Trump had the inside track to the White House, U.S. stock futures tanked. Those investors who panicked and sold on the election news lost when the market sharply rebounded on Wednesday and continued to rally Thursday. The market reaction was similar to Brexit—a decline on the news followed by a swift rebound—but it simply took place in a more time-compressed manner. The moral of that story is that in investing, like life, it rarely pays to panic.

Investing is a long-term process, and trying to consider short-term economic developments are distractions that lead to overreactions and poor decisions. Whether the issue is Brexit, the Greek debt crisis, the U.S. election, or any other issue de jour, investors should pursue a long-term strategy and resist the perceived need to change course. The Trump victory was without question a seismic development from a political standpoint. But it doesn’t warrant much of a response, if any, from the context of the average investor’s portfolio.

This is not to say that Tuesday’s result was of no consequence to individual stock sectors or companies. There are certainly sectors of the equity markets where prospects improved as a result of Trump’s upset win: defense stocks, financials, traditional energy stocks, infrastructure, and pharmaceutical companies. The prospects for other sectors have declined—namely gun and ammo manufacturers, hospital stocks, solar and wind power, and tax preparation firms.

Investors should also not infer that markets will flourish under President Trump because they have initially reacted positively to his election. One only needs to look at market reactions to the last two presidents to see the folly in assuming short-term market reaction portends performance over an entire administration. The day after President Obama’s historic win in 2008, the S&P 500 fell by 5.27%. The market didn’t learn, as it fell 2.37% following Obama’s reelection in 2012. The Obama years have been among the all-time best for equity investors. Likewise, the S&P 500 gained 1.12% the day following George W. Bush’s re-election in 2004, and the next four years were disastrous for investors.

The old adage that markets dislike uncertainty is certainly true. The uncertainty over who was going to win the presidency has now been replaced with the uncertainty of how effectively President-elect Trump will govern. Needless to say, we don’t invest in a certain world.

 

If you had an investment plan before Tuesday’s election, you should follow the same plan going forward. If you’re working with a financial adviser, a certain red flag, and one that indicates you should perhaps find a new financial adviser, is if he/she recommends wholesale portfolio or strategy changes as a result of Trump’s electoral victory. There is a mistaken belief among do-it-yourself investors and overly zealous advisers that one needs to zig when the market zags, making changes in response to global political and economic developments.

The bottom line for investors: Stay focused on your longer-term goals. To paraphrase the late Jerry Garcia, what a long, strange trip it is going to be.

Robert R. Johnson is president and CEO of the American College of Financial Services and co-author of Invest With the Fed.