Stocks closed lower on Wall Street on Monday, and to Jim Cramer this was a perfect example as to why he has been against the Federal Reserve raising interest rates. During his long career on Wall Street, Cramer has seen the first stages of a rate hike and knows it is not good for stocks.
"Stocks in a ton of industries go down, even as a few go higher, which is exactly what we saw today," the "Mad Money" host explained.
And while Cramer is against the rate hike, he does accept its inevitability. Low rates cannot last forever, even if they are good for the stock market for the duration.
What stocks will be the biggest losers of the rate hike? One loser stock out there right now is Party City, which Cramer said the only party it would have would be the one to celebrate clearing out all of the inventory that it has to clean out.
Cramer also wants investors to beware of stocks that yield 3 percent. Those are considered bond-market equivalent. If there is another set of strong employment numbers in January, then there will be another rate hike.
Lastly, there is one group that many investors do not think about, and it's the most important. Many stocks will not be impacted by higher interest rates or will do nothing. Those companies will get heat from activists or be forced to merge to gain heft.
"I know what happens when the first set of rate hikes begin, and it's not good for the vast majority of stocks … All I want is for you to know that we've been through this cycle many times before, and you'd better get used to it," Cramer said. (Tweet This)