CNBC’s Jim Cramer on Wednesday laid out a view he believes retail investors should adopt to help themselves cut through commentary about the stock market.
The “Mad Money” host said, “I want you to have a list of stocks you like and prices where you think they’re worth buying.”
“When your favorite stocks hit those prices, you buy them. That way you avoid being intimidated by your wits by people who want to make you feel like a fool for being rational,” Kramer continued.
Cramer said his strategy could help protect against an overly bearish group of market commentators, including high-profile investors, who share their views publicly.
“It looks like they’re out to get you. They’re not, but they sure as the cat isn’t out to save you,” Kramer said. “Even their neutrality can scare you into buying something good, especially when the market is down and it’s easy to scare anyone away with your wits.”
Despite the criticism, Cramer said he believes his recommended approach can help viewers shrug off negative external forecasts when stocks are struggling to move higher and instead choose their preferred stocks. Can help you capitalize on attractive entry points.
To be sure, Cramer said it’s possible that attempts to “buy the dip” may be poorly executed, even though it has proven to be an effective strategy in many stocks over the past decade.
However, he stressed that his point is to make it clear that other people’s scathing comments should not deter investors from working on their planned strategy. “It’s absurd that we regard dip buyers as the height of folly; of course you should try to buy stocks at lower prices,” Cramer said.
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