Jim Cramer of CNBC advised investors on Tuesday not to overreact to the recent losses on Wall Street, arguing that the dip was inevitable and would eventually present a chance to purchase high-quality equities at a discount.
After a day like today, all you can do is patiently hunker down and wait for lower prices,” Cramer stated on “Mad Money.” “Somehow, I think we’ll get them.”
With losses of 0.72% and 1%, respectively, the S&P 500 and Dow Jones Industrial Average saw their worst sessions in almost a month on Tuesday. They also had their second day in a row in the red. The tech-heavy Nasdaq Composite began the second quarter with a modest increase on Monday, but it later fell by 0.95%.
According to Cramer, more drops could be in store as investors struggle with growing oil prices and rising bond yields linked to better recent economic indicators. Since late October, the market has risen, and he predicted that a pullback would soon be necessary. “What really matters is that we haven’t had a sell-off in so long that we’ve forgotten to handle them,” Cramer said.
When evaluating the reasons for this week’s losses, Cramer said he isn’t too worried about what it would mean in the long run for equities.
“Yes, we’ve got higher rates, but the impact on the economy is not profound,” Cramer said. “Meanwhile, the impact on the market is what you’d usually expect: People pay less for stocks when rates go up. We’ve just kind of forgotten that happens.”