Cramer fears Donald Trump is your worst investing nightmare

If Donald Trump does not accept the verdict of the American vote in November, Jim Cramer fears it could be a major blow to stocks.

"The idea of this election dragging on past Election Day is a nightmare for investors," the "Mad Money" host said.

There is so much money waiting on the sidelines that is waiting to get back into the stock market. But if Trump contests the vote, Cramer says the market won't be able to mount an early November rally that investors expect once the election is over.

While Trump did say on Thursday he would accept the results of a decisive vote in his favor, Cramer said investors need to watch to see if the race will be close enough for Trump to contest. The uncertainty generated from that could hold back the averages.

Donald Trump
Mike Segar | Reuters
Donald Trump
"I think people underestimate just how much of an impact Washington can have on the course of business in this country." -Jim Cramer

"I really don't care about politics and I am absolutely not trying to partisan here. I care about stocks, which is why I need you to recognize that the results of this election could require you to adjust your portfolio," Cramer said.

On the other hand, if the Democrats win in a landslide and take both the White House and both houses of Congress, Cramer expects a new wave of regulation to hammer stocks in various industries.

The ideal outcome for the stock market, Cramer said, would be a gridlock. This means a divided government with one party in control of the White House, and the other running Congress.

"I think people underestimate just how much of an impact Washington can have on the course of business in this country," Cramer said.

Stocks trade based on predictions of future earnings streams, Cramer said. Anything that makes it more difficult to predict the future makes investors want to pay less for stocks. A contested election could mess up the entire process and create a significant amount of uncertainty that could impact the market.

The longer investors wait to find out the results of a potentially contested outcome, the longer the market will sit in anguish as it waits for precious clarity.

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