Mad Money

Deceptively consistent, these blue chips worry Cramer

If there's anything Jim Cramer can't say often enough it's understand your holdings. And when holding a spec stock or a growth play, many individual investors often do understand the catalysts and the risks.

However, there are some higher yielding blue chips out there that worry Cramer.

They are Kimberly-Clark, General Mills, Clorox and other stocks "that grow at about 3% with a 3% dividends and price-to-earnings multiple that's three times that," Cramer said.

The "Mad Money" host thinks many individual investors view these kinds of stocks as consistent, steady-eddy investments that will slowly march higher in good times as well as bad.

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And that's not wrong – they often do.

The issue, right now, is that the landscape is shifting in a way that's uniquely problematic for these otherwise market stalwarts.

When interest rates dropped to historic lows, investors who would have otherwise bought bonds put money to work in these stocks for their yield. As rates go higher, it's quite likely these investors will rotate out of these div-yielding stocks and back into bonds.

At the same time, when the economy improves, more aggressive investors who are currently holding these stocks will likely take profits and put that same money to work in stocks of companies that stand to benefit from global growth. Stocks such as Alcoa.

As a result, Cramer expects two big blocks of investors will shun Kimberly-Clark, Clorox, General Mills as well as other tried and true blue chips, ultimately sending them lower.

And he doesn't want you to get caught holding the bag.

"These stocks are simply terrible trades when the economy heats up," Cramer said.

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Now make no mistake, although Cramer expects declines in the stocks listed above, he also thinks they remain well run companies. And Cramer still advocates owning stocks of well- run companies.

"Are they terrible investments? I think not. If you can take some pain then I would stay the course," Cramer said. In time there will be every reason for these stocks to rally again.

However, "if you can't take the pain, then I'd think about selling," he added. In an improving economy with rising interest rates "I don't think these stocks will make significant gains, anytime soon."

Call Cramer: 1-800-743-CNBC

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