CNBC’s Jim Cramer on Wednesday laid out an approach that he believes retail investors should adopt to help themselves cut through commentary about the stock market.
“I want you to have a list of stocks you like and prices where you think they’re worth buying,” the “Mad Money” host said.
“When your favorite stocks hit those prices, you buy them. That’s how you avoid getting scared out of your wits by people who want to make you feel like a moron for being rational,” Cramer continued.
Cramer said his strategy can help guard against what he thinks is an overly bearish group of market commentators, including high-profile investors, who publicly share their views.
“It sounds like they’re out to get you. They’re not, but they sure as heck aren’t out to save you, either,” Cramer said. “Even their neutrality can frighten you away from buying something good, especially when the market’s down and it’s easy to scare anyone out of their wits.”
Despite the criticism, Cramer said he believes his recommended approach can help viewers get past negative external prognostications when stocks are struggling to move higher and instead capitalize on attractive entry points in their favorite stocks.
To be sure, Cramer said it’s possible that attempts to “buy the dip” can be executed poorly, even if t’s proven to be an effective strategy in many stocks over the past decade.
However, he stressed that his point is to illustrate that fearful remarks from other people shouldn’t keep investors from acting on their own planned out strategy. “It’s absurd that we treat dip buyers as the height of idiocy; of course you should be trying to buy stocks at lower prices,” Cramer said.
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