Investors should stop worrying about the actions of the Federal Reserve and instead focus on maintaining a portfolio of strong companies, CNBC’s Jim Cramer said Wednesday.
“You don’t have to analyze every word of the Fed if you’re buying stocks of good companies that are built to last, because those are the same companies that are suffering from ever higher commodity costs. [Fed Chair Jerome] Powell is pulling up to help them as well as you,” the Mad Money host said.
“I think [watching the Fed’s moves is] very important if you trade bonds, but most of you don’t. This is very important if you are borrowing money to buy shares. It’s not something you should be doing in the first place, and after today it’s even dumber than it was,” he added.
Cramer’s comments followed a market rally on Wednesday, fueled by a 0.25 percentage point rate hike by the Fed. The central bank is also forecasting six more increases this year. The Dow Jones Industrial Average rose 1.5% and the S&P 500 rose 2.2%. The Nasdaq Composite rose 3.7%.
10-year Treasury yields hit their highest since pre-pandemic levels since the Fed’s announcement.
Cramer previously advised investors to look for leading companies in a particular industry and invest in businesses that bring in money and tangible products. He held this opinion about investing in profitable companies, advising investors to shift their focus from following the Fed’s policies to more productive activities.
“Higher parlor game players, I have ideas for them…maybe they could fill their March Madness brackets for hours and hours – a much better use of their time,” Cramer said.