3 takeaways from our daily meeting: Portfolio diversification, waiting on inflation data, Ford downgrade

Published Mon, Oct 10 202212:04 PM EDTUpdated Mon, Oct 10 202212:18 PM EDT

Every weekday the CNBC Investing Club with Jim Cramer holds a "Morning Meeting" livestream at 10:20 a.m. ET. Here's a recap of Monday's key moments. Stay diversified Stocks fall ahead of key economic reports Quick mentions: F, PG 1. Stay diversified We start the week by reiterating how important it is for investors to keep their portfolios diversified, particularly in such a volatile market. During the "Morning Meeting" on Monday, we encouraged members just getting started to review the more than 30 stocks the Club owns and buy roughly 5 to 10 of them. A good example that illustrates the importance of diversification is what's going on in the semiconductor space. Chip stocks dragged down the market on Monday after the U.S. announced new export controls limiting semiconductor sales to China . This is one of a myriad of issues that have plagued semiconductors over the past year, including waning demand in the PC and handset market, ongoing Covid-19 restrictions in China and recession fears. We have four chip stocks – Advanced Micro Devices (AMD), Marvell (MRVL), Nvidia (NVDA) and Qualcomm (QCOM). But we don't advise individual Club investors to own all four names. Investors "should not have a massive amount of semis," Jim said. We're recognize these stocks area headed south in the short term, and have cut back on our positions to further diversify and strengthen the Club portfolio. 2. Stocks fall ahead of key economic reports Semiconductor stocks dragged down the Nasdaq Composite on Monday by 1.3%, to its lowest level since September 2020, while chip- and tech stocks also weighed on the benchmark S & P 500. The equities slide comes as investors are nervously awaiting producer price index (PPI)- and consumer price index (CPI) data due out this week — both key metrics of inflation that could determine future interest rate hikes by the Federal Reserve. The PPI could show inflationary pressures easing, while the CPI is still likely to reflecting rising prices, Jim said Monday. The S & P Oscillator was at 3.28% after Friday's sell-off, which means we aren't in oversold territory at the moment. We encourage investors to stay patient, as it's likely the market will decline further. 3. Quick mentions: F, PG UBS downgraded Ford (F) to a sell, citing worries about the auto industry reaching oversupply in 3 to 6 months, while noting the company has the most stretched full-year guidance in the bank's coverage of original equipment manufacturers (OEMs). We've been itching to buy back shares of the automaker, but we're not planning to add to our position right now. Goldman Sachs downgraded Procter & Gamble (PG) to a hold, citing headwinds from the strong U.S. dollar and a slowdown in Covid-19 pandemic market-share gains. (Jim Cramer's Charitable Trust is long AMD, F, MRVL, NVDA, PG, QCOM. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.