Never Buy All at Once

A good investor can't be arrogant, Cramer said. And the single most arrogant thing an investor can do is buy a whole position in a stock at once. Never do this.

Here’s an example: The smart and humble way to buy a position in Boeing would be to pick up 25 first, then wait. See if the stock pulls back, buy more on any weakness, and patiently wait for good entry points as you gradually build up your position.

Investors send a message when they buy a whole position at once: “This stock will not go down any further from here. In fact, it’s all up from this moment on.” If an investor buys all at once, and then the stock dips, he feels like a moron – and he should, Cramer said. A little more patience and little less arrogance would have landed him some shares at a better price.

Now, a broker might not like getting these little incremental trades, but the investor is the shot-caller in that relationship. The timing of a buy is never perfect, so don't rush. Just acknowledge that there's a possibility the stock could drop, allowing a better chance to buy more.

Bottom Line: Don’t be arrogant. Don’t buy stocks all at once. Be patient and buy incrementally.

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