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Investors and the ‘long view’ to survive a volatile market

  • CNBC’s Jim Cramer said Tuesday that despite the scary events of recent weeks, investors shouldn’t make decisions based on day-to-day fears.
  • He explained that history often proves that owning stocks of high-quality companies is the recipe for navigating a volatile market.

CNBC’s Jim Cramer said Tuesday that investors are acting out of fear and instead need to take a longer-term perspective of the market and “increase the positivity.”

Cramer acknowledged that investors’ concerns are not unfounded and that on the surface, this market looks like “the sum of all our fears.” The past year has been marked by a consumer pressure, economic tensions with China and Russia, a downturn in the office real estate market and, most recently, massive bank failures.

But cashing out and selling is not the answer in these uncertain times, Cramer said, especially as “we have no idea” what the ultimate long-term impact of these external events will be.

For example, Cramer pointed to the recent collapse of Silicon Valley Bank, which sparked early concerns that the Great Recession would repeat itself. This led to the sell-off of oil and industries, which people assumed would be affected by the bank-run contagion. But First Republic Bank and regional banks were steady on Tuesday after Treasury Secretary Janet Yellen said bank deposits would be protected, sending investors back to oil and industry.

That reversal proved that investors are making choices based on short-term concerns rather than longer-term analysis.

In addition, Cramer gave some in the market a do-no-do on Tuesday in anticipation of Federal Reserve Chairman Jerome Powell’s announcement of his next rate move on Wednesday. He added that those who take investment decisions based on the fear of the day are not thinking long enough.

Bottom line: “Anyone who thinks they know what’s going to happen in the next hour or two has been proven wrong this time. Say you’re onto a winner,” Cramer said.

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