CNBC’s Jim Cramer said Wednesday that he doesn’t feel good about the stock market right now, but is optimistic about the long term.
Cramer said the market isn’t so ugly that cash is king and investors should forgo it altogether, but he indicated it’s always a good idea to have some on hand.
“We’ve been in this selloff for over a month and I still think it’s a tougher time than most investors seem to believe,” he said. “It doesn’t matter. We have money for the charitable foundation – I hope you do too. Money may not be king here, but it certainly isn’t either a pawn.”
One reason to worry is the attractiveness of the bond market, Cramer said, with some investors drawn to risk-free Treasuries. Stocks will decline if long-term bond yields continue to rise, he added, noting that this week’s series of colossal bond auctions could hurt stocks. He also noted that many investors believe earnings are the most important factor when evaluating stocks, saying some recent market gains based on earnings could be short-lived.
Cramer mentioned Wednesday’s monthly meeting for the CNBC Investing Club’s Charitable Trust, where he found himself “lounging, hedging and warning.” on the short-term performance of many stocks.
“When you own more than 30 stocks and you can only recommend half a dozen stocks to buy at that particular moment, that’s the ultimate sign that cash is a trick,” he said . “It’s not king, because there are still stocks worth buying here – if cash were king, you would sell, sell and sell – but there are too few right now to justify a direct purchase.”
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