Investing in Today’s Market

In his recent book, Getting Back to Even, financial expert Jim
Cramer shares tips on investing in the current economy. Understandably frustrated after losing
retirement funds and life savings, people are afraid of investing in the stock
market. However, investors have to get over their fear if they want to make
back the money they lost.

Cramer establishes his credibility in investing
in past bear markets and recessions. In 2000, while NASDAQ was down 39.29
percent, and the S&P fell by 9.1 percent, Cramer’s hedge fund, Cramer
Berkowitz & Company, was up 36 percent. He also admits to past mistakes
that left him in the same position many of us are in right now. Unlike being
the manager of a hedge fund, where clients are trying to pull out their money,
individual investors can afford to be patient when rebuilding their capital.
Unless retirement is right around the corner, time constraints shouldn’t be a
big issue.

Investors must fight the urge to give up and put
their money in a savings account. You will simply never get back to even this
way. Cramer explains the difference between owning stocks and trying to make
money in stocks. The “buy-and-hold strategy” is what financial advisors will
tell you to do. Even in the recent
recession, people were advised to keep their money in the stock market and not
convert to cash, and their money repeatedly took hit after hit. Buying a stock
simply to own it does not work.
Cramer discusses his philosophy, “buy and homework”, which we all should
be doing. He says, “For every stock you own, you must spend at least an hour a
week checking up on the underlying company, and that's in addition to the
research you ought to do before buying a new stock.” Cramer relates this to a
mechanical inspection for your car. Just as you wouldn’t let your car go
without a check-up, investors should be reassessing their stocks to see if it
is time to sell or trade. Knowing the difference between simply owning stocks and
owning stocks to make money is necessary to getting back to even. You can’t
afford sit back and accept whatever the market hands you, you need to be a
proactive and knowledgeable investor in today’s market.