The stock market hit all-time highs on Wednesday following Donald Trump’s victory in the presidential election. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite each reached new record highs.

Here’s what you need to know about why the market responded the way it did and what it means for your investment strategy.

Why markets rose after the election

Attribute of analysts market growth to two key factors:

1. Reduced uncertainty. As I did previously coveredthe prospect of a new government and potential policy changes can create a whirlwind of speculation, leading to market volatility that can unsettle even seasoned investors. An election result – regardless of the winner – removed the uncertainty that weighed on markets before the vote. In fact, the US stock market has historically tended to rise regardless of which party wins at the White House.

2. Prospects for a business-friendly government. Investors anticipate pro-business policies from a second Trump administration and a Republican-controlled Senate.

The Dow rose more than 800 points, or 2.9 percent, while the S&P 500 and Nasdaq gained 2.2 percent and 3.9 percent, respectively. As we’ve already seen, Trump has a penchant for rolling back or rolling back regulations, which benefits sectors that would have been subject to greater scrutiny under the Harris administration. Banking, energy and technology stocks were among the biggest gainers in the days following the election.

What does this mean for you?

While this news might make it tempting to buy Tesla shares or Bitcoin, you might want to take a stab at it first. As a general rule, financial advisors caution investors against making sudden and drastic changes in their portfolios based on this unique event.

The the so-called “trade with Trump” could easily turn into a bumpy road — investors should be wary that parts of Trump’s economic platform, such as tax cuts and tariffs, could fuel inflation. Furthermore, all the details of the timing and implementation of the Republican policy agenda are hardly clear at this point.

It is never a good idea to dramatically alter your investment strategy in response to a particular election outcome. Instead, this could be a good time rebalancing and make sure you are not over exposed to any sector or company. So while the rally can be tempting, always evaluate your total asset allocation before entering.

Allowing current events to constantly influence your financial decisions can lead to emotional stress and decision making influenced by fear or overconfidence. After all, you’re not as objective as you think you are…here are some tips to avoid losing money because of it. Finally, experts recommend being disciplined and sticking to your long-term investment plan, regardless of who occupies the White House.

And if you have recorded some earnings and anticipate a large expenditure in the short term, converting some of your earnings into cash or deposit certificates could be a good move.