CNBC’s Jim Cramer urged investors not to get out of the market completely despite the ongoing massive sell-off. He added that markets eventually find they are low and that stocks have a way to bounce back.
Cramer also looked back to the late CNBC anchor Mark Haines, who infamously marked the market bottom on this date in 2009 at the height of the financial crisis. In recognition of what came to be known as Haines’s bottom, Cramer counselled investors that even at their worst, stocks will eventually find support, so it’s crucial to buy selectively.
Jim Cramer tells investors to stay the course amid market turmoil
While conceding that he doesn’t have Haines’ foresight, Cramer reiterated that buying into declines has been the right call over the long term since 1979.
It is true that Cramer said there are situations where getting away from the market makes sense, but when he was advising about getting out at the Haines Bottom, he said he said it in the context of investors taking their money in the next five years. He acknowledged that the market went down significantly from when he first issued the warning but emphasized that those who began buying near the market bottom had strong returns over time.
The recent market maelstrom has been fed by a mix of forces—from concerns over rising inflation to Federal Reserve interest rate policy to geopolitical anxiety. The S&P 500 and the Nasdaq have been hit hard in recent weeks, with technology stocks suffering particularly sharply. Investors are also considering hesitation over earnings reports and fears of a global economic slowdown.
As crazy as it gets, Cramer still swears by his long-term belief that long-term investors should own high-quality stocks while not panic-selling every time the market goes south. He highlighted historical comebacks following prior sell-offs, such as the COVID-19 market crash of 2020, when markets rebounded sharply after reaching the bottom.
Cramer highlights buying opportunities in the tech and defensive sectors
Shares of mega-cap tech names such as Apple, Microsoft, and Meta — and have all recently been sold off — “still have good fundamentals,” Cramer said, and “might represent the kind of buying opportunity you’ll want long-term.” He also emphasized defensive sectors that tend to do well in turbulent economic times, like healthcare, consumer staples, and energy.
Cramer noted that people should invest in the stock of quality companies to benefit more significantly over a longer period of time. He noted that the vast majority of gains in the market happen on just several key days each year. He warned investors against trying to time the market, as missing those key recovery days can have a big impact on long-term returns.
Ending market declines follow a historical pattern in which markets eventually recover from downturns. The Haines Bottom of 2009 is an excellent example of how investor psychology can change at the drop of a hat, giving rise to large gains for those who remained invested.
“Think of it like this: days like today are what kept you out of the big gains in the same stocks. Most people never get back,” he said. “They don’t buy, they forget, or they think that they can’t tempt fate or the market’s too brutal.”
Jonny Cramer Cramer’s message when he said it: While the market sell-off now is troubling, history teaches that continuing to invest in strong companies pays off over time. Larry Fink: Show Caution — But Identify Opportunities in Lower-Valuation Stocks.
