CNBC’s Jim Cramer on Monday offered tips to investors for how to make smart trading decisions as skyrocketing inflation and Russia’s invasion of Ukraine roil the stock market.
The “Mad Money” host has a three-pronged approach for investors to cut through the confusion.
- Don’t attribute every stock movement to Russia’s invasion: “When you see stocks down badly and they have nothing to do with the event that’s causing the decline — in this case, Russia — it makes no sense to panic at all. If you sell, you’re just trading off the futures, not events … and you’ll end up losing money,” Cramer said, mentioning semiconductor stocks as an example.
- Be familiar with the companies you invest in: “I bet the sellers of these stocks had no idea what they are; otherwise they would’ve stayed the course,” he said.
- Most importantly, take advantage of opportunities that do exist: “Remember what matters and what doesn’t,” Cramer said.
While investors might balk at the thought of owning stock of banks that could be affected by economic sanctions, they shouldn’t sell shares of companies that won’t be affected, such as Tennessee-based First Horizon, Cramer said. “You sell something like that at your own peril,” he said.
“The only defense is to know what you own and recognize that you must not be shaken by events that have nothing to do with your stocks,” Cramer said. “You must steel yourself at night and in the morning before the open, because the aggressive futures traders often turn out to be dead wrong,” he added.