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Jim Cramer's 5-Point Plan For A Protected Portfolio

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Jim Cramer's 5-Point Plan For A Protected Portfolio

Love him or hate him, CNBC's Jim Cramer's knowledge of the stock market and investment strategies is vast and impressive. So, when he comes out with a basic strategy to help investors protect their portfolio, investors should take a few minutes to read up on his ideas and decide for themselves how to proceed.

Cramer said during last Friday's "Mad Money" show that his diversification tools could help retail investors manage their own funds better.

For starters, investors should hold at least 10 different stocks in their portfolio, but no more than 15. This way it isn't overly difficult for investors to keep track of their holdings and follow the companies' latest news and earnings releases.

Related Link: Differences In Opinion: Big Names Weigh In On Whether The Market Is Overvalued

In addition to holding a diversified portfolio, investors should diversify it in a way that offers maximum protection against downturn and declining markets, while also providing the ability to achieve superior returns compared to the benchmarks.

With that said, Cramer recommends every portfolio include exposure to the following five:

    1. Gold
    2. A high yield dividend paying stock
    3. Growth stocks
    4. Speculative stocks
    5. Stocks from a "healthy" geography

"Cover all five bases, and you'll have a portfolio that can win in any market," Cramer emphasized.

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Posted-In: CNBC CNBC Dividend Paying StocksAnalyst Color Analyst Ratings Media Personal Finance Trading Ideas Best of Benzinga

 

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