The Dow Jones surged over 300 points today, after investors became hopeful that the political deadlock in Washington is coming to an end. The rally came as House Republicans said that on Thursday they will offer the White House a six-week extension of the nation's borrowing limit in exchange for wide-ranging negotiations on spending. Today's advance was the biggest one-day point gain since Dec. 20, 2011 and the biggest on a percentage basis since Jan. 2, when Congress reached a deal to avoid the fiscal cliff. However, many investors said they remain cautious because a deal hasn't actually been reached yet.
It seems to me that one of the best ways to make money on the stock market is by investing in what are seemingly times of crisis. If you had invested Wednesday, you would have made a nice return over night. That seems to be one of the emerging themes of the stock market. No matter how bad the outlook seems, they always rebound strongly afterwards. This was true in the Great Depression and true in the 2008 Financial Crisis. Investors should keep their eyes peeled for similar opportunities.