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Cramer: Avoid These 2 Sectors

Thursday, 18 Aug 2011 | 8:22 PM ET
Time to Duck & Cover?
Mad Money host Jim Cramer offers some market wisdom after today's brutal 420-point drop.

As stocks closed off their worst levels Thursday, Cramer urged investors not to diversify into technology and bank stocks, even though these sectors compromise more than 25 percent of the S&P 500 index .

Bank of America helped lead the Dow Jones industrial average down 419.63 points, or 3.68 percent to finish at 10,990.58. The tech-heavy Nasdaq tanked 131.05 points, or 5.22 percent, to end at 2,380.43.

"A day like today is precisely why I caution, once again, that tech and the banks are just no good," Cramer said. "There’s a couple of techs worth owning, including Apple on the weakness, but you have to wait until the end of the seasonal downturn, in about four weeks, to do some buying."

Until then, Cramer noted there are other buyable areas right now, including everything from food to drugs, as well as oil and gas. To be clear, Cramer favors a diversified portfolio—just not one that includes tech and bank stocks right now.

When this story was published, Cramer's charitable trust owned Apple and Bank of America.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

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