UKTN’s Jim Cramer told investors Wednesday that diversification remains key to maintaining a successful portfolio.
“I can’t say that a diversified portfolio is bulletproof. But I can say that it makes it easier to stay in the game when a particularly popular group is put through the meat grinder,” he said.
The Nasdaq Composite and the S&P 500 closed lower Wednesday as investors processed the latest string of corporate gains. The Dow Jones Industrial Average rose slightly to end the trading session.
Tech stocks fell on concerns about Microsoft’s softer-than-expected outlook, extending the Nasdaq’s losses for the second day.
The recent declines come after a solid start to the year for the tech-intensive index, as hopes that the Federal Reserve could ease the pace of rate hikes sent investors back to growth stocks.
“Honestly, if you have too much technical exposure, if you get a day like today you could just say, that’s it, I’ve had enough, I’m getting out of this racket. Well, that’s why you need to stay diversified ,” Cramer said.
He added that he still does not advise investors to expand their technical holdings, even after the recent declines. “I want to stay in the game. I don’t want to be blown away when the tech grim reaper hits.”