In more than 30 years of investing, Jim Cramer has created a vast rule book surrounding the market. His goal is for investors is to learn these rules and apply them without even thinking about it, starting with discussing the importance of strategic cash placement in a portfolio.
Much to his surprise, Cramer has found that a lot of people aren't prepared when a correction occurs in the market. They are charmed into the market when things are good and then unprepared when things get bad. They assume that a correction means that something is wrong and that stocks shouldn't be touched.
"That is a very big mistake. Corrections happen all of the time after big runs, and they are to be anticipated, but you can't write off the market when they happen," the "Mad Money" host added.
Another mistake that Cramer sees commonly is that many believe they are supposed to be fully invested at all times. He has even met money managers who think they are supposed to have all money invested.
This is complete nonsense!