Don’t Listen To Jim Cramer On This!

don't listen to jim cramer

Every now and then I watch “Mad Money” with Jim Cramer on CNBC.  Since I don’t watch much TV, financial programming is pretty much what I gravitate to.

Now, Jim Cramer has helped many people – and still does every day.  His show has been wildly successful over the last 14 years.  He is very wise regarding the stock market.  I am quite often in agreement with him.

However…he sometimes gives advice that makes me cringe in my chair.

The piece of advice I want to address today is the idea of selling your original investment once you’re up 100 percent.

For example, let’s say you invested $1000 in a stock, the price doubles, and your investment grows to $2000.  He’s saying that you should sell $1000 worth and let the rest ride.

Here’s the problem I have with that.  Suppose you invested in Amazon, Netflix, Booking Holdings, Home Depot, or Walmart.  Had you done what Cramer suggested, you would have left hundreds of thousands – in some cases millions – on the table.

Yes, from a $1000 investment you could have left a great deal of money on the table over a lifetime!

If you’re fortunate enough to buy a stock, and the price doubles, please hold on!  

We measure investment success in percentages gained over a period of decades.

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click here to be taken to its Amazon page.

(Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)

 

 

 

What Is A Speculative Investment?

If you’ve ever watched The show “Mad Money” on CNBC, you may have heard the term “spec”, which is short for speculative investing.

A speculative investment is when you buy shares in company that is unproven, which makes its future uncertain.

A good example would be a developmental biotechnology company.  Most speculative biotech companies’ fortunes depend on their ability to create a drug that can successfully treat a disease.  If their clinical trials show results, they may receive FDA approval to commercialize their drug.  However, the odds of FDA approval for most drugs are low, so these investments come with a great deal of risk.

I think every investor should have at least one spec in their portfolio.  Just make sure you don’t overload your portfolio with them.

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click here to be taken to its Amazon page.

(Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)