CRAMER EXPLAINS HOW TO MAINTAIN A BALANCED PORTFOLIO AS THE ECONOMY SLOWS

  • CNBC's Jim Cramer on Tuesday said Wall Street is going through a tricky stage of the business cycle, and told investors to keep a diverse portfolio while preparing for some losses.
  • "I'm not telling you to relax, I don't do that on this show — not with the averages so close to all-time highs," he said. "I'm just saying we are going into the valley of death here, and you should fear no evil, as long as you have a balanced portfolio."

CNBC's Jim Cramer on Tuesday said Wall Street is currently going through a tricky stage of the business cycle with the economy slowing and the Federal Reserve not yet cutting interest rates. He said it's wise for investors to maintain a balanced portfolio and prepare to weather some losses.

"I'm not telling you to relax, I don't do that on this show — not with the averages so close to all-time highs," he said. "I'm just saying we are going into the valley of death here, and you should fear no evil as long as you have a balanced portfolio."

Cramer laid out a few stocks that don't rely on the health of the broader economy to hold as things start to slow down. He named the usual Big Tech high achievers — Nvidia, Meta, Alphabet, Amazon and Apple — as well as Big Pharma names Merck and Pfizer. Cramer said he likes these drug companies' anti-cancer treatments.

But rate cuts from the Fed may be coming sooner than some think, according to Cramer. So he also suggested investing in companies poised to soar when the central bank starts to bring rates down, like Builders FirstSource. Shares of the building supplier sank on Tuesday when its CEO revealed during the company's earnings call that customers were having "affordability issues" as high interest rates persist.

"If you put all your money in stocks that need rate cuts to win, you will be slaughtered," Cramer said. "But if you go all tech and drugs, you'll be left in the dust when the Fed finally starts cutting."

Meta, Alphabet, Apple, Merck, Pfizer and Builders FirstSource did not immediately respond to a request for comment. Nvidia and Amazon declined comment on Cramer's remarks.

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Nvidia, Meta, Alphabet, Amazon and Apple.

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2024-05-07T22:47:56Z dg43tfdfdgfd