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Apr.17
8:14 PM ET
Friday, 17 Apr 2009
Why Cash Is Crucial

You don’t have to be all in stocks all the time, Cramer often says. Cash holdings are just as important.

In fact, Cramer put his hedge fund in cash just in time to avoid the Black Monday crash of October 1987. And investors who took his advice a few months ago, on Sept. 19, 2008, to sell 20% of their portfolio would have been spared the Dow’s plummet from 11,300. They got a second chance on Oct. 6 at Dow 10,000 when he warned again that investors should move a significant piece of their holdings into cash.

Investors should be more worried about downside than missing any potential recovery. So remember that it's almost never too late to sell. Better to prepare for the worst than hope for a turnaround. Hope can cost you a lot of money.

Watch the video for more on why cash is crucial.




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