Cramer Antidote: Invest for the Long Term


Buy, buy, buy! Sell, sell, sell.   cramer_with_wig_cropped It’s arguably fun to listen to Jim Cramer and his antics. His foolish, outrageous, and amusing behaviors are entertaining. But Cramer’s frolicking is NOT investment advice. He constantly encourages his viewers to sell one stock and buy another. He’s bearish one day and bullish the next. His active portfolio management style is, like his show, insane. You’ll NEVER hear stalwarts or committed investors, Warren Buffett among them, encourage you to sell a position based on short-term results or buy another based on anticipated or potential upside surprises in performance. Cramer’s notion that an individual, do-it-yourself investor can achieve superior results by constantly trading in and out of stocks is ridiculous. Trading costs alone will eat an individual investor alive.

Because it’s far from entertaining, you’ll never hear Cramer say something like, “Build a well diversified portfolio which includes exposure to multiple different asset classes, and except for periodic rebalancing, leave it alone for a decade or more.” However, we’ve heard Warren Buffett say, Warren_Buffett_crop“Always invest for the long term,” and, “If you don’t feel comfortable owning something for 10 years, then don’t own it for 10 minutes.” Investors who have achieved long term success know that appropriate investment strategies are simple, low cost, transparent, and disciplined.

The Cramer Antidote is to invest with a long-term horizon.

DO NOT constantly trade your portfolio trying to chase returns based on momentum, perception, trends, or today’s sentiment. Listen to Buffett and other successful investors whose track records speak for themselves. Invest with a long term horizon, and always remember the financial media is entertainment, not advice.

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