CNBC's Jim Cramer cautioned investors on Tuesday against dumping their stocks in a panic, saying it's a big mistake when the market is only down a couple percentage points.
He spoke as stocks were tanking on Tuesday. The Dow Jones Industrial Average was down more than 400 points, or around 1.7 percent. The S&P 500 was down 2 percent as the industrials and tech sectors underperformed.
"The panic is so ripe that it is no longer a strategy," Cramer said on "Squawk on the Street." "I'm offering right now a 'cool yourself' [strategy.] ... I don't want to be a seller down 2 percent."
"If you sell down 2 percent, you better have a darn good reason," said Cramer, host of "Mad Money." He added Tuesday's session appears to be a "garden variety" sell-off.
The markets fell Monday in part on worries about a deluge of corporate earnings reports coming this week.
The S&P 500 has dropped for four sessions in a row, and 11 of the past 13 sessions, while the Dow and Nasdaq are on pace for their worst month since January 2016 — all through Monday's close.
Cramer has previously advised that sell-offs that occur during earnings season often provide great opportunities for investors to build positions in top-notch stocks.
On Tuesday, Cramer said he would only sell if it appeared the market was going to down roughly 3 or 4 percent.
— CNBC's Elizabeth Gurdus contributed to this report.