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A Bear-Market Rally Is Still a Rally

An investor’s goal is to make money, Cramer told viewers on Monday. So never sit on the sidelines when stocks are on the move.

That’s the rule whether we’re in a bull market or a bear market. Of course, both Wall Street pundits and the press corps love to ask existential questions about just what is a proper rally. They’ll talk down a bear-market rally, saying it’s not worth profiting from. But Cramer urged retail investors to ignore all that.

“It encourages you to stay on the sidelines,” the Mad Money host said, “in spite of the fact that you think stocks are heading higher.”

A rally is a rally, and it doesn’t matter if it’s bull or bear. The strategy will be the same for both: Pick winners, and take profits when you have them. No doubt the people who ignored the Dow’s monster jump from its early March 2009 lows – a whopping 36% over the following three months – are regretting it. Don’t be a member of that group.

You can bet against stocks when they’re dipping downward, Cramer said, and even sit on the sidelines when the market’s going lower. But it’s “the height of foolishness” to opt out of a moneymaking opportunity just because it’s happening in a bear market.

“I’ve never seen a rally that caused people who own stocks to lose money,” Cramer said, “so don’t be scared away by the bear-market-rally canard.”

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