CNBC’s Jim Cramer on Wednesday made a case for investors to choose individual stock picking over index funds going through market turmoil.
The “Mad Money” host laid out a “shelter-in-place” list of companies that he projects can cut through the global economic challenges set off by the coronavirus pandemic.
“For years, lots of very smart people … told us that index funds were really the best if not only way to invest,” Cramer said. “But sometimes trying to mirror the market is a bad strategy” because “you have to own so many have-nots along with the haves.”
The S&P 500, an index of 500 large-cap stocks that is largely representative of activity on Wall Street, is down more than 15% from its closing high nearly two months ago. The stock average fell another 2.2% to 2,783.36 during Wednesday’s session.
The S&P 500′s performance is influenced by both the worst decliners, such as Norwegian Cruise Line, which is down nearly 80% this year, and the top gainers, such as Regeneron Pharmaceuticals, which is up 36% this year.