Jim Cramer, host of Mad Money on CNBC and former hedge fund manager, has kept his advice as simple as it can get; hold cash or own gold.
On Monday Cramer warned that investors should remain cautious about stocks for the near term, further elaborating that it’s better to let the market figure itself out through the seasonal correction investors are used to during September. Historically equity indices have shown an average of -1.1% during the month of September since 1919.
“I have said over and over again to you that September is the cruelest month, and it’s playing out that way once again, with rolling corrections all over the place, something that is, again, typically a precursor for the seasonal decline that begins in just a couple of days,” Cramer said on Monday.
The Dow Jones and S&P 500, two of the biggest U.S. market equity indices, were down0.76% and 0.23% on Monday that extends the losing streak to five sessions. The only consistent performers as of late, Cramer says, have been oil and gas companies. But he also explains that they are the “worst kind of leadership” for the market because a jolt in energy prices results in higher costs for companies in other sectors who are already seeing unprecedented increases in raw material costs.
“Sure, on any given day, we can see a relief rally. Today the Dow held up fine. Some health care stocks went higher, chiefly the health insurers. Banks put on a decent show,” Cramer said.
Cramer is still cautious about what’s coming and is strongly advising his viewers to prepare for extreme volatility and review personal portfolios to ensure one is set up to take advantage of the volatility.