Cramer's 'Playing Defense' Rules: Part 2

Forget about making money. Sometimes holding on to what you have is much more important.

That was the focus for Monday’s show. Cramer offered up 25 rules that will keep you from losing your hard-earned cash when the market’s at its worst.

Remember: Plan for the downside, and let the upside will take care of itself. The best way to do that is by following these important tips.

5. It’s always good to have cash on hand. Don’t scoff at money market accounts. Sure, a dividend from AT&T or Verizon might pay more, but the extra money will come in handy when the market takes a dip and you want to buy some broken stocks. As Cramer said, stop looking at the cost of being in cash and start thinking about the price you pay for not having cash when you need it.

6. Don’t own too many wild swinging stocks. Sectors like natural gas, copper, steel, fertilizer, rails and tech can be very volatile. A portfolio full of these plays can be a bit much for the average investors. Be sure you’re up to the challenge if you want to own these names.

7. Know what you own. Cramer’s said this before, but if you really haven’t done the homework on the stocks you hold, you’re not in a position to make smart investing decisions. Think about it: Do you really know what Celgene does? What about NVIDIA? If not, consider different stocks.

8. Stocks under $5 can be dangerous. These names feel to these lows for a reason. Keep that in mind when you’re thinking you can make a quick buck off single-digit stocks. They can cost you just as much money as your other holdings.

9. Accounting irregularities equal sell. This is another Cramer maxim you’ve probably heard before. His bottom line is that these stocks can’t even be thought about until the next quarter’s earnings are out.

10. Steer clear of any company that reported a earnings miss for at least two quarters. They number can actually be much higher depending on the situation – nine or 10 quarters if need be. The only reason Cramer said two is because he’s never seen a turnaround quicker than that.

Click here for Cramer's 'Playing Defense' Rules: Part 1

Click here for Cramer's 'Playing Defense' Rules: Part 3

Click here for Cramer's 'Playing Defense' Rules: Part 4

Click here for Cramer's 'Playing Defense' Rules: Part 5

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

Contact Mad Money

  • Showtimes

    Monday - Friday 6p ET
    Saturday 8a, 1p, 7p SYD
    Sunday 12a, 1a, 8a, 7p SYD
    New Zealand
    Saturday 10a, 3p, 9p NZ
    Sunday 2a, 3a, 10a, 9p NZ
  • Jim Cramer

    Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.

Mad Money Moments

Cramer's New Book