Jim Cramer says investors need to think about lightening up on their biggest winners and start raising cash.
If there are stocks in your portfolio you’re not happy with, now’s the time to sell, Jim Cramer cautioned his Mad Money viewers Tuesday, after Federal Reserve Gov. Lael Brainard slapped investors with harsh comments that riled the markets.
Brainard is widely known as one of the most “dovish” Fed governors, one that favors low interest rates and increased growth. She was one of the loudest voices last year proclaiming that inflation was only transitory and would be headed lower.
But today, Brainard hummed a different tune, making statements that said it’s of “paramount importance” to get inflation under control. She said the Fed is “prepared to take strong action” that includes “rapidly” reducing the size of its balance sheet as early as next month’s meeting.
These comments sent the markets tumbling, because by all measures, our economy is already slowly and aggressive action may be the last thing we need. Mortgage rates just hit 5%, with mortgage applications falling off a cliff. Auto sales are weaker and Baltic freight prices are also tumbling. Retailers like RH (RH) – Get RH Report have already warned high-end consumers are pulling back.
That’s why Cramer encouraged viewers to lighten up on their biggest winners and start raising cash. He was still bullish on healthcare and oil, as those sectors are likely to flourish no matter where we are in the economic cycle. For everything else however, it’s time to start getting cautious.
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