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Jim Cramer's investment portfolio for the US-Iran conflict: 'Cash lets you take advantage' of buying opportunities

Key Points
  • "If we really get the conflagration that so many people seem to be expecting ... you have to be ready for the market to take a beating, at least in the short-term," CNBC's Jim Cramer says.
  • "If you think a genuine war with Iran is inevitable, you want cash, you want gold, utilities, oil, defense and cybersecurity," the "Mad Money" host says.
  • "Wars tend to create buying opportunities and cash lets you take advantage of them," he says.
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Jim Cramer's US-Iran conflict playbook: Cash, gold, defense and more plays

CNBC's Jim Cramer on Monday laid out a basket of investment plays to hedge against the growing conflict between the United States and Iran.

"If we really get the conflagration that so many people seem to be expecting ... you have to be ready for the market to take a beating, at least in the short-term," the "Mad Money" host said, adding "if you think a genuine war with Iran is inevitable, you want cash, you want gold, utilities, oil, defense and cybersecurity."

Cramer suggests investors can store cash away in three-year Treasury bonds, which yield less than 1.6%, or in money market funds that yield a little more. In the case of war, it's wise to put half of one's capital into cash because it provides enough flexibility for a "true war-time asset allocation," he said.

"Wars tend to create buying opportunities and cash lets you take advantage of them."

Investors will also want to inject money into gold, either in the GLD ETF that tracks the sector, or individual gold stocks. Bullion is the safest thing to own, and it's worth owning outside of the United States for extra protection from risk, Cramer said.

For a value play he recommends Barrick Gold, which merged with Randgold in 2018, and Agnico Eagle, which has operations in Canada, Finland and Northern Mexico.

Utility securities that pay dividends are another safe bet in Cramer's playbook. American Electric Power holds a 3% yield, Consolidated Edison offers 3.4% and Dominion Energy touts a 4.5% dividend.

"I speak with the CEOs of these three utilities regularly. I like what I hear," Cramer said.

In the event that Iran shuts down the Strait of Hormuz, the channel where ships carry 21 million barrels of oil each day from producers in the Middle East to global markets, crude prices will see an ephemeral spike, Cramer said. The oil plays in his purview include Schlumberger, Pioneer Natural Resources, BP and Conoco.

L3Harris Technology is the only defense contractor that Cramer recommends. The stock is about $6 off its highs. Cramer passed over other names like Raytheon, Lockheed Martin, Northrop Grumman and General Dynamics because they have run too high for his liking.

On the cyber defense front, Cramer likes Crowdstrike, whose CEO is warning that people should expect Iran to retaliate against the death of its top commander with cyber warfare.

"Unfortunately the stock caught fire today, so you might want to wait for a pullback before pulling the trigger."

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Jim Cramer's US-Iran conflict playbook: Cash, gold, defense and more plays

Disclosure: Cramer's charitable trust owns shares of Schlumberger and BP.

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