Investors should be careful not to base market decisions on Russia-Ukraine peace talks, but also not be overly pessimistic, CNBC’s Jim Cramer said on Tuesday.
“I want to be optimistic about the negotiations,” but Russia’s past promises of peace that it has not kept make that difficult, the Mad Money host said.
Russia on Tuesday said it would scale back its attacks in the Ukrainian capital Kyiv and 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 “fear [investors] sell or hold near the lows [them] on the sidelines,” he denounced those who had warned of imminent Federal Reserve rate hikes that would have disastrous effects, noting on Monday the partially inverted yield curve that could portend a recession.
Meanwhile, the Dow Jones Industrial Average was up 0.97% and the S&P 500 was up 1.23% on Tuesday. The Nasdaq Composite rose 1.84%. The Dow and S&P 500 rose for the fourth straight month.
Noting recent market rallies, Cramer said bearish analysts’ predictions had been proven wrong. He also offered the S&P 500 short-range oscillator, one of his favorite market indicators, as a trusted basis for investment decisions.
“I have a doctrinal approach to this indicator: if it’s too negative, you have to hold your nose and buy something because it means the market is a coil spring,” he said.
“The same oscillator hit a very positive number today. … My discipline says it’s time to duck your horns,” he said. “We still want to buy some stocks after the oscillator settles down, but we are mainly interested in the oil and agricultural stocks, which have been hit by the news about the Russia-Ukraine peace talks,” he added.
Cramer also said investors should generally exercise discipline when managing their portfolios.
“One of the most important elements in managing your own money is a good cost basis…the average price you’ve paid for your stocks. Most of the problems I see in investing often stem from you getting a bad base – buying too high, which regularly happens, causes a lot of people to sell too low,” he said. “I want the opposite cause.”