Strategy: Combining Index Funds with Select Stock Slots

about 1 month ago

Jim Cramer

"I say own an index fund for half your money. You've got to be saving constantly and then take five slots. Try to find four really good stocks and a speculative one. ... Provided that you try to find the next FANG. And I'm fortunate enough to create a FANG because it was just something that seemed funny."

Jim Cramer recommends that individual investors balance their portfolios by allocating half of their investments to index funds and using the remaining half to take concentrated positions in five stocks (four quality long-term holdings and one speculative pick). He even entertains ideas such as investing in niche areas like nuclear power or Bloom Energy for hydrogen fuel cells. Although not a direct buy call on a specific stock, this recommendation aims to encourage retail investors to move away from day trading and focus on a structured, long-term approach to compounding returns.

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