Tech stocks like Skyworks Solutions or Micron Technology , are trading vehicles, as opposed to staples like Pepsico and Altria , which “plod along slowly.” These trading vehicles are winners when a product cycle is strong, but are losers when the cycle is weak.
Often the high-flying tech stocks will get hammered after the first sign that anything is deteriorating. When that happens, don’t tell yourself it’s too late to sell. Use any intra-day weakness to lighten up, Cramer said.
Discipline also makes a huge difference, he said. Don’t be “greedy” when owning these stocks — take something off the table and play with the house’s money.
“Don’t treat risky trading vehicles like shooting star tech stocks as though they’re staples that can be owned for ages,” Cramer said. “Remember to take profits on the way up, and to get out on the way down — you don’t have to call the top to make money in these names, you just have to be willing to jump ship when it’s clear the stock has peaked and is ready to head down for the count.”
—Read on for Cramer's Top Dividend Stocks
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