Cramer says oil and energy trades fueled by Venezuela news are unwise

CNBC’s Jim Cramer said Monday that investors tracking the market’s reaction to political turmoil in Venezuela are making a familiar mistake: mistaking short-term trading opportunities for long-term investing.

Cramer urged investors to focus on owning and sticking with high-quality stocks rather than jumping into trades where valuations could change with every headline.

“I want you to own individual stocks, not trade them, as well as an index fund,” Cramer said. “Let the power of compounding do its work.”

Cramer’s comments come as markets have broadly recovered. The Dow Jones Industrial Average rose 594.79 points, or 1.23%, to an all-time high.

But Cramer cautioned that geopolitical stories don’t always translate into lasting business opportunities. Although President Donald Trump’s move to oust the Venezuelan leader has sparked speculation around oil and energy stocks, Cramer said much of this rise has already been priced in.

He pointed out companies like. Striplike US refineries Valeroand oil services companies halliburton These are examples of stocks that have risen on speculation, even though rebuilding Venezuela’s oil industry could take years and require large investments.

Cramer noted that meaningful results will likely be fully realized within years rather than days, noting that investors often underestimate how long it will take for political change to show up in corporate profits.

Instead, Cramer said investors should focus on areas of the market where valuations still provide protection when stocks pull back.

Cramer said Goldman Sachs is in a position to benefit from mergers, acquisitions and equity issuances. He also pointed out citigroupbelieves it can continue to beat earnings expectations and Capital OneFollowing its acquisition of Discover, it described it as one of the cheapest major banks on the market.