Markets don’t always behave in ways that make sense. Last Friday was a perfect example. After President Trump and Iran jointly announced that the Strait of Hormuz was “fully open,” stocks ripped higher and oil prices plunged. Later that day, my brother texted me: “I went to cash earlier. Now I feel like an idiot.”

He’s not alone. Plenty of investors felt whipsawed by the sudden shift in sentiment. But I reminded him of the only question that truly matters when markets go haywire:

“Can I afford the consequences of the risks I’m taking?”

He’s nearing retirement. His answer is very different from that of a 25‑year‑old with decades ahead of them. And that’s the point: irrational markets don’t change your personal risk capacity.

To understand why last week felt so chaotic, let’s walk through what actually happened.

A Week of Contradictions

The Strait of Hormuz crisis continued to dominate global markets. Late in the week, the head of the International Energy Agency warned that Europe had “maybe six weeks or so” of jet‑fuel supply remaining. Airlines began canceling flights. That alone should have rattled markets.

Then came reports that refining margins in Europe had turned negative. This is exactly what happens when crude prices spike: refiners struggle to pass through higher feedstock costs, margins compress, and in extreme cases they dip below zero.

Yet refining stocks have rallied right alongside crude. That’s not rational behavior. Even though U.S. margins are holding up for now, rising crude is not a bullish backdrop for refiners.

Friday: The Most Irrational Day of the Week

Then came Friday’s announcement that the Strait of Hormuz was “fully open.” Markets reacted as if the entire geopolitical crisis had been resolved. Crude prices plunged more than 10% intraday. The markets surged as traders piled back into growth stocks. Gold, which had been firm earlier in the week, slipped as risk appetite suddenly returned.

But the fine print told a different story.

Iran said the Strait is open only if vessels follow a “coordinated route” dictated by Iranian maritime authorities. That is not “fully open.” It is restrictive, it limits throughput, and it raises costs as Iran imposes transit fees. Nothing about that setup is bearish for oil.

Then, to underscore the absurdity of the moment, Iran announced on Saturday morning that the Strait was closed again.

And to be perfectly clear, even if the Strait was fully open, it’s going to take months to get back to normal. And with Iran controlling the flow of 20% of the world’s oil, we are probably looking at higher oil prices for the foreseeable future regardless of what happens.

The Macro Backdrop Didn’t Support the Rally Either

Even outside the geopolitical noise, Friday’s euphoria didn’t line up with fundamentals.

• Inflation data earlier in the week came in slightly hotter than expected.
• Federal Reserve officials continued to signal that rate cuts are not imminent.
• Treasury yields drifted higher, with the 10‑year ending the week above 4.3%.

None of that is consistent with a sudden “risk‑on” environment. But markets traded that way anyway.

Why I Never Try to Time the Market

Last week illustrates exactly why I don’t try to time the market. Investor psychology can push prices in irrational directions far longer than fundamentals would suggest. You can make reasonable decisions and still get steamrolled by sentiment—or by short‑term actors trying to manipulate markets.

You can’t control any of that. What you can control is your discipline.

The only sustainable approach is to ignore the noise and stay focused on the long term.

If Your Horizon Isn’t Long Term, the Question Changes

For investors who don’t have a long time horizon—like my brother—the calculus is different. That’s where the key question comes back into play:

“Can I afford the consequences of the risks I’m taking?”

If the honest answer is “no,” then moving money to cash isn’t cowardice. It’s prudence.

Markets will always have irrational moments. Your job is not to predict them. Your job is to survive them.

The Bigger Picture

Another way to make sure you’re prepared for the unpredictable nature of the markets? Learning how to turn dividend stocks you already own into a high-yield income engine that can multiply the income you already have coming in.

On Monday, April 27 at 3PM ET, I’m hosting a 100% free, 60-minute briefing on my options-income strategy that delivered a 35.5% average annualized return across 30 closed trades in 2025 — with only one realized loss in 4 years.

You can reserve your spot right here.