Jim Cramer’s 7 Basic Rules of Investing
The stock market can be a rough ride for individual investors. Sometimes, entire sectors that are being endlessly hyped can suddenly tank — the dot.com bubble, for example. Other times, trading can appear to be dominated by a series of interlocking automated programs, creating scenarios such as the so-called “Flash Crash” of 2010.
Political forces can impact markets in seemingly unpredictable ways, such as the partial government shutdown causing a general depression on Wall Street or a change in Securities and Exchange Commission policy allowing or disallowing certain types of trades. To top it off, individuals like Bernie Madoff have become household names, representing the greed that can cause some to turn their investing operations into outright scams.
In the midst of all of these issues, how can the little guy survive, let alone make money? Jim Cramer, the host of CNBC’s Mad Money, answered the question by urging a return to some of the fundamentals of investing. He said some of the simplest rules are the most relevant. Cramer of course conceded that there are many risks inherent to investing — some of them not directly related to the stock market — but he added that there are also many ways to mitigate those problems.
Let’s take a look at seven of Cramer’s top tips for personal investors looking to stay alive in today’s markets.