CNBC commentator Jim Cramer said this week’s volatility has turned investing in the stock market a very dangerous endeavor.
The "Mad Money" host sees what he called poison “in what has suddenly become a very treacherous market," as
stock and oil prices continue to trigger unpredictable moves.
If investing is going to remain volatile until — and possibly after — the Federal Reserve hikes interest rates, Cramer highlighted some stocks in which to seek shelter from the storm.
"From now on we must accept that stocks are going to be punished by Fed chatter, no matter what happens with commodities or the averages or even the data, because the Fed wants to raise rates," Cramer added.
“Cramer recommended investors own companies that don't need to worry about a rate hike. That group includes FANG — Facebook, Amazon, Netflix and Google, CNBC reported.
“Another group of stocks that Cramer thinks could work in this environment are those that reflect too much negativity and could be bought either for trade or an investment,”
CNBC reported. Those include Kohl's, General Mills, Kimberly-Clark, and pharmaceutical companies.
To be sure, Zack’s Investment Research points out that real estate investment trusts have declined this year with the growing expectation that the Fed will raise interest rates, putting pressure on dividend-paying stocks.
But a rate hike is no reason to shun REITs entirely, according to Zack’s Investment Research, which has identified four picks that may hold their value as they’ve done in the past even as rising rates help to lift the dollar’s value.
A rising dollar makes U.S. goods more expensive abroad and makes profits earned in foreign countries look smaller.
“A surging dollar may force the Fed to hike rates at an extremely slow pace,”
according to a Zack’s report on the SeekingAlpha blog. “Though counterintuitive at first, picking real estate investment trusts (REITs) may continue to be a good idea in such an environment.”
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