Jim Cramer Is Not Your Financial Advisor.

Jim Cramer Is Not Your Financial Advisor.

February 24, 2022

Jim Cramer Is Not Your Financial Advisor.


    -  Famous Jim Cramer quote (rant) in regards to the Fed on the cusp of the great financial crisis of 2007-2009.

Jim Cramer. Smart guy. Successful money manager. Great TV personality. Not your Financial Advisor. He says it himself in so many words at the beginning of each show when he declares that he is there to entertain and to teach. But he KNOWS NOTHING when it comes to your particular financial situation. So, when viewers call in to his TV show Mad Money (which the name should raise flags in and of itself) and ask if they should buy/sell/hold company X or company Y, Cramer has zero sense if this is an appropriate investment for the person’s financial plan. Maybe they should not be in stocks at all given their financial phase of life, their net worth, their emotional make up, etc. Maybe Company X (lets use QCOM) is a great company and stock in and of itself, but the person works there and thus adding even more exposure to the stock is not in the person’s best interest (the very same stock can be a buy for one person and a sell for another. It might be entirely appropriate for Bill Gates to be selling shares in MSFT regularly for diversification purposes, but for someone with no tech exposure in his portfolio, adding MSFT could be a smart financial move). Simply put, without truly understanding myriad factors about an investor, there is simply no way you can provide good advice (which he never claims he is doing per se, although I am sure many viewers take his buy/sell/hold recommendations and apply them to their own situations).

Imagine if you walked into a gym and a personal trainer started having you lift weights and run on the treadmill without asking you anything about your physical history, current health, future goals, etc. Maybe your objective is to improve your swimming and allow your knee to recover from an injury. Some people are looking to gain weight in the form of muscle, while others seek to lose fat. The point is: everyone’s health situation and goals are entirely different and unique to them. The same goes with one’s fiscal health. Unless and until you have a deep understanding of the person’s past experiences (e.g. has the person sold stocks in a panic every time the market drops over 10% even though they don’t need the money for years? Then the advice is different), present situation (assets, liabilities, cash flows, etc.), and future goals (retirement, large purchases like a 2nd home, estate matters, funding kids’ college, etc.) then there is no way to give any advice on a particular asset class, let alone a security (e.g. a stock) within that asset class.

So if you watch Jim Cramer or other TV financial personalities, recognize that 1) they know nothing about your particular circumstances, and if they did they might recommend the exact opposite of what they just said on TV, and 2) even with all the necessary information to make such a recommendation, the security itself may change fundamentally such that it is no longer a buy/hold/sell, not to mention the investor’s circumstances are inevitably going to evolve leading to modified advice over time. Financial advice is specific, circumstance-driven, and ever evolving. Make sure you are working with someone who will take to time to understand you and your situation intimately – both for today and on an ongoing basis.

Article by Scott Kyle


How Best to Invest Extra Cash at the End of a Tax Year?

If you are fortunate enough to have a little extra cash at the end of tax season, the question then becomes: what to do with it? With the exception of credit card debt (which should always be paid down first… no one can beat credit card interest rates), various options include:

  • Revisit your cash needs for the next 12 – 24 months. If you already have these covered, great. If you need to pad these reserves a bit, then do so with the extra cash. Here’s what you should consider to do after that:
  • IRA – there is rarely a situation where investing in an IRA isn’t a great idea.
  • Taxable account – this can be a particularly good idea if you’ve already maxed out retirement plan contributions and/or you have upcoming cash needs i.e. a down payment.
  • Pay down mortgage - while generally not the best choice (mathematically) given low interest rates, there is a peace of mind that can come from paying down a mortgage.
Article by Patrick Fischer



This Time is Not Different.

As I began to write about how we’re in a market correction and that it’s important to remember that this time is no different than the other time…. and the other time before that, my colleague Laurie sent out a great video that she made recently, which eloquently explains my message. Rather than reinvent the wheel, here’s the link to Laurie’s video:

Link to video here.

In summary, here are a few things to remember now and always:

  • Don’t try to time the market. We can’t and we end up chasing our tails in the process.
  • Manage your portfolio based on cash needs. What are your cash needs for the next 12-24 months? This will dictate asset allocation.
  • Diversification is key. Whether it’s in index funds (like the QQQ in the video) or a basket of high-quality stocks, diversification pays off in the long run.
  • A knowledgeable, patient, and well-trained Financial Advisor can help you determine which investment strategies are best for you and set forth a near and long-term plan to implement them.
Article by Patrick Fischer