Investors should be careful not to make market decisions based on Russia–Ukraine peace talks, but should also refrain from being too pessimistic, CNBC’s Jim Cramer said Tuesday.
“I want to be optimistic about the negotiations,” but Russia’s previous pledges of peace that it didn’t follow through with make that difficult, the “Mad Money” host said.
Russia said Tuesday that it would reduce its attacks in Ukraine’s capital of Kyiv and in Chernihiv as the two countries met for peace talks in Istanbul. It has broken similar vows in the past.
Cramer added that he still has grievances against bearish analysts who “scared [investors] into selling near the lows or kept [them] on the sidelines,” decrying those who warned the Federal Reserve’s upcoming interest rate hikes would have disastrous effects and pointed to the partly inverted yield curve on Monday, which could be forecasting a recession.
Meanwhile, the Dow Jones Industrial Average gained 0.97% on Tuesday and the S&P 500 rose 1.23%. The Nasdaq Composite increased 1.84%. The Dow and S&P 500 gained for the fourth consecutive session.
Pointing to recent market rallies, Cramer said the bearish analysts’ predictions have proven to be false. He also offered the S&P 500 short-range oscillator, one of his favorite market indicators, as a trustworthy basis for making investing decisions.
“I have a doctrinaire approach to this indicator: When it’s too negative, you have to hold your nose and buy something because it means the market’s a coiled spring,” he said.
“That same oscillator hit a very positive number today. … My discipline says it’s time to pull in your horns,” he said. “We still want to buy some stocks after the oscillator settles down, but we’re chiefly interested in the oils and the agriculture names, which have been hit by” news of Russia–Ukraine peace negotiations, he added.
Cramer also said investors should generally practice discipline when maintaining their portfolios.
“One of the most important elements of managing your own money is getting a great cost basis … the average price you paid for your stock. Most of the problems I see in investing often stem from getting a bad basis — buying too high, which regularly leads to many people selling too low,” he said. “I want to produce the opposite results.”