Listen to Jim Cramer’s personal guide through the confusing jungle of Wall Street investing, navigating through opportunities and pitfalls with one goal in mind - to help you make money.
Mad Money w/ Jim Cramer
Mad Money 3/12/24
At KeyBank we know a small moment like, "Whoa, my kid's got a serious backhand." Can lead to an even bigger question like, "Tennis campus, how much?" And that's the type of moment where we'll meet you. To help you build a savings plan for expenses big and small, so your money can make money. Mike, how's that sound? Sounds like match point. Sounds like love. We could serve up tennis puns all day. For every financial need, we'll meet you in the moment. KeyBank opens doors. KeyBank member FDIC. At Morgan Stanley, old school hard work meets bold new thinking. At 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. Old school grit, new world ideas, Morgan Stanley. To learn more, visit morganstanley.com/yus. Investing involves risk Morgan Stanley Smith Barney LLC. My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a more market somewhere, and I promise to help you find it. Mad money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramer, a few of my friends. I'm just trying to make you a little money. My job is not just to entertain and educate, but I want to teach you and explain. Tonight, I'm doing it. So call me at 107.3 CBC, or tweet me at Jim Kramer. We too often invest for the day. I always hear people talk about what's working at the moment. In the old days, when the great markings ruled the mornings around here, I remember that each time I co-hosted, he would introduce me as Reverend Jim Bob from the church of what's happening now. It was fun back then. It seemed like everyone was running their own personal hedge fund. There was an understanding that a stock could be here today, and going tomorrow and everything was fine. Everyone was fine with it. Those days are over though. And if you recommend a stock for trading, even if you say buy it today for the analyst meeting tomorrow, and then you sell, there'll always be a video. YouTube kicking around shows you like the stock, but never gave the sell call. So we've gone beyond that. We're all about educating you to be a better investor. The same thing we do every day at a higher, intense level at the CNBC investing club that I want you to join. Tonight, I want to introduce you to this concept that is so important, and it's called suitability. Basically, what stocks fit you? What investments are right for you? Not for this week, not for this month, but for your age, for your temperament. I first heard of the concept of suitability when I was in training at Goldman Sachs for the group that helped small institutions and individuals, now called private wealth management. I've been buying individual stocks for myself and others for a half decade before I got to Goldman in 1983 as a summer engineer. At the time I was watching Financial News Network between classes at Harvard Law School, that was the predecessor to CNBC. Whenever I could, I'd run over to the Harvard Business School Library, where they had all these old research reports from long-going firms like Baysh, Sherson Lehman about stocks, totally on a catch-as-catch-cat basis. Those of you who grew up with the internet have no idea how hard it was to access information in the 80s. If I liked to company, I would have to ask the librarian for a microfiche of the firm's SEC filings. I don't know, do they still have microficias? These were little pieces of plastic that you stuck into a machine, and you read the filings, all which were usually six months old by the time I got them. Everything I did back then is online now and instant and updated. The imperfections in the market back then were legion. Now, everyone can know everything, but we'll learn that later tonight. I spent all week trying to find one stock that I thought would grow, one stock that would be good for a week, where anyone who wanted to invest could take the idea. And then I changed my answer machine, yes, my answer machine, another thing we got rid of. I changed the message to a 20-second wrap on the stock. Don't know, answering machines? Can you imagine, well, some company used to make them, with all those jobs wiped out by your cell phone. Same with the answering services for that matter. Talk about jobs that aren't coming back. Anyway, I'd say, hi, this is Jim, I'm not here right now, but I like both the chart and the recent numbers from People Express, along since Bankrupt Airline, that I used to check down in New York for Child Interviews. My best one, a recommendation from Monolithic Memories, a smoke show of a company with a red hot stock that was run by a guy named Zeev Drory, who two decades later helped save Tesla back when it was struggling during the financial crisis. He was the last CEO before Elon Musk. Anyway, Monolithic shot up like a rocket that we can only end up being acquired by advanced micro devices at a very big premium. It was the best Kramer's not at home call this machine hit I had ever had. And believe it or not, Jim is not home, became a rallying cry for lots of people who were calling me back then, hoping I wasn't home, so they could get the tip without having to interact with me. Not long after I got a job at Goldman Sachs, one of the officers at the firm called me in and got the machine with this recommend, he heard the recommendation, he told me to call as soon as possible. I did, and he asked me if I knew what suitability was. I had no idea, so he introduced me to the concept. He asked me that I ever considered that many people who called me may not be ready for the stock of the hottest semiconductor company in the land, and that I was recommending it to them one on one without any sense of it. Whether it was right for them, suitability, was it soup? I said I always looked at stocks with pretty much a caveat after situation. We all know that unlike say vacuum cleaners, you can't take stocks back to the store and get a refund. They come with no guarantee, so what's the deal? This executive hammered it into my head that before you recommend a stock on a one on one level and a registered brokerage house of all places, you had to know what that person wanted out of, what do they want from stocks? You had to know if the stock was right for them and for their level of risk tolerance. My other memories, he said, wasn't exactly right for anyone other than the most risk-seeking investors out there. The financial women are bungee jumpers, so let's start there. Today, I want you to ask yourself, what is your tolerance? How much risk do you want out of a stock? You see, stocks are pretty peculiar pieces of merchandise when you think about it. You buy a car and you know it's not worth as much as the moment it leaves the lot, correct? But there are all sorts of warranties. You buy a house and you know it can burn down the next day. However, you can buy it before you buy it. You get a binder with insurance, so if it does burn down, you can get your money back. Clothes can be returned, devices return, phones, PCs, washers, dryers, you name it. But stocks? If you buy a shared Nike in the next day, Goldman Sachs downgrades it, and then a day after Foot Locker says there's a bit of slowdown in Jordan's, you can't go back to your broker and say, "Hey Chief, you never told me this could happen. I'm down 300 bucks on 2000 shares and I'm out of 600--" "Hey man, I'm losing too much money, I want my money back." Sorry, caveat empty. Now back then, when I got started, it would have been incumbent upon the broker to recognize that the buyer would know these things could have it. Maybe the broker should never have been recommending that stock to begin with. You get to point them, because you can't take stocks back and get the same price, because there's no real insurance, although you could buy an expensive put option underneath, with a cost that lowers the risk of Nike pretty dramatically and has to be renewed constantly. Suitable is incredibly important. That's why for the next hour you're going to learn how to measure your own tolerance versus a variety of factors, because these days with digital brokers, there's no real protection. Just a signed form that says, "You get it. You may not know what you're getting into." Tonight, the bottom line, that stops here. By the end of this show, you'll know what suits you and what doesn't, no matter what your age or your style, or to put it that in another way, caveat empty. No, just buyer be a little more aware of what you might be committing your hard earned dollars to when you purchase a stock. Let's take calls. Let's go to Kyle in New Jersey, Kyle. That's friend Jim Kramer. How are you, buddy? I am good, Kyle. Thanks for calling. How can I help you? So, I was wondering, first of all, I am an investment club member, and this is my third time talking to you, man. Terrific. I feel like I know you personally. I love you to death. I would like to know how often you look at RSI or MACD data when you're buying or selling a stock. How long have they looked at the relative strength index on the back? I have to tell you, I look all the time. I do not like to buy stocks where the chart is bad. It's one of the reasons why we do off the charts on Tuesdays. I think it's incredibly important, Kyle, because others do, and anything that's important to others is important to me. Mark in New York, Mark. So, guys, I'm Jimmy Cho. Cho me in here. What's happening? I have an IRA account. I have an IRA account for my retirement, and I was wondering if it's okay to take some profits and then read the cash in my account at another time. Well, I prefer to let it run unless the stock is really sour, because I don't want you to remember, investing for the long term an IRA, and I have to believe that what you saw in the stock is continued. Otherwise, look, if you have to take a loss, take a loss, but keep investing in your IRA. That's the best thing you can do. Let's go to Nick in Florida. Please, Nick. A boba booyah, Jimmy Cho. Thank you. When you help your children invest, is it more important to save up and give them, say, a big snowball, a big lump of money when they get married, or set them up early, literally an infant, pay the baby with, say, a small amount in dividend stocks to rephrase it in such a way, which is more important, the size of the snowball, or the height of the hill that compounds it? Wow. I love that. Well, first, I can't help my kids. They have to do that in their room, because of my job. I'm not allowed to know what they're up to. But what I always say to my kids is that, look, I want you to go make as much money as possible with half the money, and the other half I want you to do index funds and go learn some stocks. I think when they finally decide what they're going to do with their lives, they can do it, but that's my advice to them now. I don't know what they own, because that wouldn't be right. By the end of tonight's show, I hope you'll know what suits you and what doesn't, no matter what your age or your investing style. Tonight, I'm helping you form the necessary investing strategies you need at all stages of your life. From young to old, just like the gentlemen we just talked to, I'm going to meet you where you are and take you where you need to be. So stay with Kramer. Don't miss a second of Mad Money. Follow @ChimCramer on X. Have a question? Tweet Kramer, #MadMensions. Send Jim an email to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. Miss something, head to madmoney.cnbc.com At KeyBank, we know a small moment like, "Ooh, these sandals would go really well with a beach." Can we do an even bigger question like, "Should I splurge on a trip this year?" And that's the type of moment where we'll meet you, with financial advice on everything from budgeting for travel to building savings. So maybe that destination isn't too far off. What do you think, Cindy? I think these sunglasses would go well with a tiny umbrella drink. For every financial need, we'll meet you in the moment. KeyBank opens doors. KeyBank member FDIC. In life, we're often driven by the search for better. But when it comes to hiring, the best way to find candidates isn't to search. It's to match with Indeed. Indeed, it's a matching and hiring platform used by over 300 million global monthly users, according to Indeed data. Need quality candidates fast? Use Indeed for scheduling, screening, and messaging. And you'll connect with candidates in no time. And it's not just faster. 93% of employers agree that Indeed delivers the highest quality matches compared to other job sites, according to a recent Indeed survey. And here's the best part. Listeners of this show get a $75 sponsor job credit, giving your jobs more visibility at indeed.com/madmoney. Just go to indeed.com/madmoney right now and support our show by saying you heard about Indeed on this podcast, indeed.com/madmoney. Terms and conditions apply. Need to hire? You need Indeed. Tonight's all about you, about knowing what you can and can't do because it's not right for you, because it's not suitable. Now, there are all kinds of suitability considerations in the business. First and foremost, there's age suitability. I want to start with kids, particularly babies. My money's been on so long now that there are kids who were born who are in their teens, and if their parents listened to my best picks, well, we got started. They'd already be well on their way towards some great wealth. Parents, grandparents listen up. You can give all sorts of things to families that just had babies. I want you to open up accounts for them, or at least give them some shares of stocks, so that from the earliest moment, you can start the process of saving. Now, here's my commercial for something that doesn't need a commercial, because almost every expert you hear from is in love with them. I'm talking about index funds, which aren't perfect, but they're the best way to go if you want to put your money on autopilot and you can't spend a lot of time looking at individual stocks, just to buy a competitive home market. So, if you just had a kid, you can take a couple of hundred smackers and buy some shares at an index fund for them. I'm partial to cheap ETFs that mirror the SMB 500, because those 500 stocks represent the bedrock of America's publicly traded companies. As a companion, I like any sort of total return fund that has an even broader array of stocks, a mix of both I think is a terrific way to start. Your brokerage site you use might have some fun that's higher growth, a junior growth fund, and that can be a nice augmentation, because you're buying for an infant who's got these their whole life ahead of them, their whole life. These kinds of things can really compound over time, meaning if you let it run, then money can build up on itself. Now, you might say, why am I watching a show about stocks of all these guys doing this talk about index funds? Look, I could come out here every night and talk index funds, but it wouldn't make for a version of the show, would it? I wouldn't be giving you my best advice either. I teach you how to pick individual stocks, both here, but really a huge amount in the CMBC Investing Club, because I believe that is the most effective way to go, and I like to teach in the investing club. It's my favorite venue. I think you can build a portfolio yourself that can do better than most professional money managers or index funds. You can control your own money, but I'm perfectly sanguine about the notion that stock picking and index fund investing can coexist. I just wish the proselytizers of index funds weren't such fundamentalists about how bad everything else is, so I say let's give you both a try. When you're saving for your kids, definitely start with a index fund. What's a good stock for a kid just born? I think that you should pick two kinds of stocks for your children, one with a dividend, where you can reinvest those dividend payments, get the power of compounding. That is such a good thing to teach people. We often hear the term dividend aristocrats, companies that have long histories, simply more than 25 years of increasing dividends. Love them. It's hard to go wrong with the big, well-run consumer-packness good place. You hear what I'm talking about a company like Triton Shrew, Procter & Gable PepsiCo. The best way to find out my absolute favors as soon as possible is to join that CMC investing club I've mentioned and watch what we do with the child of trust. At the same time, you also want to give your kids something with a little more juice, like the great growth stocks of an era. I mean, I'm talking about thinking apples and vinnies, the Teslas, the Metas. Now, if you do set up an account for your kids, may I please suggest going with a Uniform Gift to Miner's Act account? I'm going to call it "Ugma" for short, U-G-M-A. The rules keep changing from these, but suffice it to say that you can give children money that can accumulate somewhat tax-free over time. Again, the rules have changed so much from when I set up the mutual fund from my kids through tax-favorite gifts. I love them because they were like trust that you didn't need lawyers to create. Check with your broker for the latest rules for you and the state you're in. They do differ. I think it's one of the better tax breaks around, though. I know honey for tax breaks may not sound very exciting, but that's how you take care of your family. Besides, you don't want free money. There's one caveat with these Ugma accounts, though. If your kid is planning to get financial aid in college, you want to be very careful because that Ugma money can count as theirs and might get them disqualified, depending on the institution. One other thought I like, you know what, I believe the goal is a terrific insurance policy for any portfolio. I'm going to talk more about this later tonight, but a highly unusual yet totally blessed by me idea is to buy gold or silver coins for your kids, or just pieces of gold or silver. I've bought slivers of slivers for my kids from a dealer and pretty much forgotten about them. They may or may not increase. These are polar opposites of growth or income stocks. They don't throw off money. They don't throw anything. But in crazy times, when inflation comes wearing back and we now know it's certainly capable of happening, you got a pretty high level stock seats as the 80s. There's nothing that's holed up in value under the scenario better than mansions, masterpiece of art, and precious metals. One caveat, if you do this, remember to put the gold or silver in a safe place, please. That does not mean putting it on their masters and it certainly doesn't mean putting a hole in the ground in the backyard. A safety deposit box wore my style. So the bottom line, when a child's born, think about setting up a uniform gift to miners account and put index funds or individual stocks in there. Specifically, I like cheap ETFs that mirror the S&P 500 and on the stock side, your kids will want to at least one dividend stock, give one dividend stock for income because a high yield stock can double the value of that investment by the time your baby turns 10. You also want one high quality growth stock that you believe in for the long haul because those can rack up big gains. Don't put this off, this must be done at the earliest moment to get the most involved for your brand new love one. No one has ever regretted saving too early for their kids. They have money back in. Coming up, want to turn back the clock and invest in companies for all the kids out there? Kramer's got you covered, next. At KeyBank, we know a small moment like... Ooh, these sandals would go really well with a beach. Can lead to an even bigger question like... Should I splurge on a trip this year? And that's the type of moment where we'll meet you, with financial advice on everything from budgeting for travel to building savings. So maybe that destination isn't too far off. What do you think, Cindy? I think these sunglasses would go well with a tiny umbrella drink. For every financial need, we'll meet you in the moment. KeyBank opens doors. KeyBank member FDIC. We're going over knowing thyself tonight. How to not just buy the right stocks, but the stocks that are right for you. We've discussed the importance of suitability in the essence of what's suitable for the newborns. But what's suitable for the kids? What do you do for them? I think you should do everything in your power to get your kids involved in investing in stocks, teaching that stocks represent pieces of companies that they might like. Now, let's be honest. These days, most parents probably think they couldn't explain what a stock is to a kid, especially a young kid. That's not how I grew up in my house, though. As much as I love sports and we even had tickets for the 64 World Series, we didn't make it, but we had them. Well, to me, stocks were supreme. My father had gotten a tip from his brother, who knew a stock broker he played tennis with. Guy told him to go buy a company shares a national video, which for all I know would have made it, if it started right now, is a Facebook live show. But in the '60s, it was a total bust that cost our family a fortune. Pop would always bring home the Philadelphia Bowl and how they went out of business, the afternoon edition. And he wouldn't give me the sports section. He gave me the business section. He wanted me to learn about stocks. I'd look up closing prices, the market closed early, back then. I tried to anticipate where stocks were headed, based on moving averages of how they were doing. Straight line, this kind of thing. It was a game of momentum. Game most of the time, I only knew the stocks by their abbreviations in what we call small agate type. Oh, but it was fun game. I kept the ledger to see how I would have done one text, which was Texas Instruments, or maybe it was TGS, which was Texas Gulf Solver, or LTP, or Rockwell. All those of the companies that have disappeared, got in the choir, were just still hanging out in trade. I also bet on a lot of airline stocks, because suckers were always buying those, and most kids were suckers. Eastern and National mostly, but pretty enough, too. They were household names because of advertising. Of course, most people under 50 have never heard of any of these. I like the stock picking process so much. I got my whole fifth grade class at Penn Manor Involved. We'd all pick stocks and keep track of the closing prices for a week to see who could make the most money. The problem, of course, is that I was doing the exact opposite of what I should have been doing, although metaphorically. What I was doing then is still being done now, just picking stocks by how fast they were climbing and backing away from them if their climb seemed overextended or just slowed in velocity. Instead, I should have been taking the stocks of companies I knew, and asking my dad for a mission to buy actually one or two shares, along with the money to pay for that, which probably would have been a deal-breaker. So let's go over what would have been right and what was wrong in the picture I just painted. Think of this as a groupist and gallant from the highlights magazines that you always used to find at Dennis's office. Gallant, first of all, would never have taken a tip about National Video from his brother, who'd taken a tip from his tennis partner, who worked, by the way, for the aforementioned base. I learned later my dad had no idea what National Video even did. Imagine that he bought so he didn't even know what they did. Now, you can find out more about it via Google right now than you could learn from Jack the Broker back then. National Video, you see, made vacuum tubes for TV sets. In the old days, when you had a problem with your television, it was usually because the tube inside had blown. Of course, the technology left National Video behind, so it went bankrupt, closed the stores about five years into the shop, bought the stock, but it'd been going straight down since about five days after he bought it. The average down too many times to tell, but I know we had many a silent meal thanks to that day's decline in that God forsaken stock of National Video. I think we lost most of what we had as a family. There were a host of better stocks you could have picked back in the '60s. Most weren't that good according to the moving average, but they paid generous dividends. In retrospect, what we needed more than anything else was income. Me, the idea of picking stocks simply because they were going up was antithetical to the idea of buying stocks in companies and was more suited to dark throwing. At least I picked the hot ones, many of which were defense contractors that were getting rich as LBJ escalated to Vietnam War. Well, for me, the game was a lot of fun. But in retrospect, I learned the most about stocks from two 3M board games. Yes, they used to have board games. Now those board games are called Acquire and Stocks and Bonds. My father sold games from 3M back then. This was a job. Acquire was all about mergers and acquisitions. Stocks and Bonds was a fantastic game about accumulating wealth through risky or conservative stocks. By the way, you can get those. They're all an eBay. You can see, what I mean. These days we have whole fantasy leagues of stocks, but few of them can teach you more than that one board game, Stocks and Bonds, it holds up. Now let's go back in time and think about what I could have done differently. First, when you're a little kid, you play with toys. It would have been natural to buy shares and tell our Hasbro. Now, I'm not asking the kids to know what it means to own shares in a company in terms of price earnings, multiple or even earnings. I'm simply saying it's a way to teach kids that a company can be owned by the public, and you can own a share in that company too. They know toys. Of course, the irony should not be lost on my family. Can you imagine if my father had bought shares in a nice dividend stock for me? 3M. Rather than national video, we had a box of Cheerios on our breakfast table every day of our lives. We could have bought General Mills. What a fantastic stock. And then they were the real easy one. What kid doesn't want to go to Disney World? It's that factor in not how many people sign up for the streaming service that will always drive me back to the stock. The Disney Library alone should be enough to make you want to own shares in the company, but the theme park, I mean, come on. Let's not help think this game. I don't know about Johnson, Johnson's Band-Aids and Shampoo. They were staples and they've since been moved to Kenview. I knew then as well as I know now that Kleenex is something you use to wipe your nose. There's a good company, Kimberly Clark. These are things we aren't even taught. They're imprinted. Father's fast food, McDonald's is obvious, or the incredibly well-run Chipotle if you want something a little more organic. A lot of mine, please buy your kids a few shares in a name brand that they know and you know. Something they can see and hear and touch, then put it away. The stock won't always work out. But think of what you like when you were little or when your parents like when they were little. See if it trades. You're more than likely to have a long-term winner. More importantly, you've got a great hook to get your children into a lifetime of investing. Let's go to Madison in Texas, Madison. Hi, Jim. If I can get a guaranteed interest rate of over 5% by producing a six-month treasury bond, why should I invest in the equity market given market conditions? Okay, because six months from now, those rates may be lower. You can continue to reinvest. But the stock market is far exceeded. A longer term, anything that you're going to get in a short term. I'm not against 5%. I own 5% paper myself. But I will tell you this. You want to take the long-term view and you can buy a dividend yielding stock that is very good, like an end-bridge, like a 1-0. That'll have growth, not just a dividend, no growth-owning treasuries. Let's go to Annie and Rhode Island. Annie. Hi, Jim. Great to talk. Thanks for doing these teaching segments. I appreciate it. Oh, thank you, Ann. Thank you. That's what I got to do. I got to teach more. And that's what I intend to do for the rest of this of the run. What's going on? Hey, well, I really enjoy the segments you do on technical analysis. And I have two questions. One, what are the best resources if you want to study this? And how much should an amateur investor rely on charts versus fundamentals? Is it even a pro? Great question. Look, I think charts are integral to your thinking. I think that I really trade Larry Williams. He's just Google Larry Williams. His stuff is the best. That's where I learn all of the great people we have on, have websites. But in the end, technical analysis, I think I have a very good chapter, my last book. Annie, get rich carefully. I spend a lot of time talking about technical analysis. It must be done. Okay, here it is. I happen to have it right with me. This is what my dad sold for a living. Can you imagine if he had bought this company 3M instead of national video? We might have been able to not have to loot the grapefruit, the grape juice. I had to put the water in the grape juice. I didn't even know why. It's because we didn't have stops and bonds. Buy our kids a few shares in a name brand. Something they can see and hear and touch. Like I learned with this stocks and bond game that is available on eBay. And believe me, I wish I had the rights. I put it out again myself digitally. There's much more made money ahead. I'm giving you my best investing habit for the rest of your life. Your teams, your retirement and everything in between. And then I'm answering all your burning questions with my colleague, Jeff Marks. So stay with Rayburn. Teenagers are incorrigible. The last thing they want to hear about is stocks. They have bigger fish to fry, to which I say, so what? I'm not going to tell them what to buy. I'm going to let them tell me. People watching this show have been huge beneficiaries of the innate consumer wisdom of my two daughters. We're always searching for ideas, both on air and especially for the CBC Investing Club. Many of those ideas have come from young people. Children, step-children, their license dislikes and tell you great deal. Hey, that's why I got pine dominoes so passionately for over a decade as the stock were at higher before peaking at the end of the pandemic like this, the other delivery place. Sure, I met with Patrick Doyle, the day he became CEO, stock was at 10 bucks. Yes, the stock did taste like cardboard before he reformulated the pizza in 2010. I loved that whole line of advertising and told you I thought it was a good spec. So sure, I recommended it. But that's not what made this stock a mad money crown jewel. Nah. It was the technology. See, my kids, like your kids, hate talking on the phone. They think it's for losers. But apps, they love them. And when my kids discovered the dominoes app, well, they were sold. No talking to people who might get their order wrong, no nervousness, no worries about where their pizza was in the process. That's two things that the great local joints couldn't do. And a no cheese option for the vegans, the ones that asked twice about the cheese as in, "Are you sure you want no cheese?" I think that's because of my kids. Finally, there was the joy of being able to pay online before the delivery person got there. Kids still want to fuss with money. Of course, dominoes was just the tip of the iceberg. The delivery apps went on to take over the world. All this technology was totally lost to me though. I never reminded the phone was always patient about whether pizza would arrive, never cared about the interchange from a delivery person. In short, I was not like the target audience. That's why I started calling dominoes a tech company that sells pizza, although now competitors can just outsource the darn stuff to the door dash. Many of you know the story of how I got religion on app. Roughly 20 years ago, my youngest daughter asked for a second iPod, not because she lost it as I immediately accused her of doing, but because she wanted one in another color for her. See, they were fashion accessories. She didn't want it to clash with her outfits. Personal computers? I mean, come on. My various employers have never raised Apple, but my kids, for a long time, they'd rather be caught dead than use a Windows machine. They only wanted backs. The iPhone was more controversial. They don't like change. They didn't like the plug change. They didn't want the earbuds, but what they really don't want is the Samsung. See, they're part of the Apple ecosystem. Much to ride a much ignored Apple ecosystem with its service chargers that make it so they have to pay them to store all their millions of pictures. What else? Fabulous. Google it, Dad. Yeah, that's how I found out about Google, now Alphabet. And when I got the word from the kids, they weren't allowed to Google something and if they were involved in school, well, just count me in. When I was doing my senior thesis at Harvard, I used some mindless name dropping. We had access to the fabulous librarians that hoped their job took up anything you wanted. They had to go to the stacks for you as they were called and find out things that you would know where to look for. Well, that's all digital now. My kids get their news from their iPhones and they get their entertainment from Netflix. No, for Anne wasn't purely their creation. I figured out Amazon, but Facebook, like I said, I went to Harvard. When you were a freshman, you got a book. It was called Facebook and then everybody's pictured it. Facebook is a derivation of that Facebook. My kids were on Facebook earlier. My youngest got sick of Facebook early on, probably because I got wanted, but then she went on to Instagram, which Facebook cleverly acquired and then kept us something separate. So you really didn't know it was part of something that older people had discovered. I didn't think the ads worked until we were inundated with red hot chili pepper merchandise, but on the clip for something that is my daughter said wasn't an ad, just a link. Oh lord, does everyone else read that their ad is just a link? But it seems that only Mark Zuckerberg has the forethought to care about the user experience to such a extent that it works because the ads actually make sense. You do want to click on them. How about your pulley? The kids love the fresh and organic pulley salads still do. They're vegetarians. My youngest returned pretty early after the food sickening incidences. The only difference being that she didn't take out because she didn't want to be seen inside. I just want to take out. Now that's perfect about the pics, but I recommended this stock from the low hundreds all the way to 2000 largely because they liked it so much. Eventually your kids will age out of the key demographic. However, if you pay attention to their likes and dislikes, you can get yourself decades worth of good stock pics. But once they reach a certain age, you need to pray for grandchildren if you want the freshest ideas. What if the pics themselves aren't any good? What if they aren't? That your kid likes a device that fits on your head and takes pictures or it fits on a wrist and measures steps out of it? Hey, that's the cost of learning. Remember, they have their whole lives ahead of them to make that money back if it's a screw up. You see, that's the beauty of teen investing. You can lose it and know one will notice. You pull the same kind of thing later in life and it's real consequences like here for me. So the bottom line is that for now you can learn from your teenage children. Trust me, invest with them and you will not regret it. My money is back after the break. Coming up, are you trying to figure out which kinds of investments are right for your age? Well, look no further. Professor Kramer is taking up the assignment. Next. All night I've been talking to you about suitability. What's a suitable investment given your tolerance for risk and especially your age or when you're picking stocks for your kids to get them interested in the market? So how about the rest of our lives? Sadly, as you get older, you have less flexibility. Fewer investments are indeed suitable. Not initially though. When you're in college, I don't expect you to put any money away at all. College costs too much. When I used to be doing my college tours, trying to get back in that game, I tried to get people to buy a share or two of a stock. But college saps to live in daylights out of you in so many financial ways. I now regard as a total hardship to even contemplate savings. But once you're out of the real world, it's imperative that you save, probably through a 401(k) plan at work or even better, a self-directed IRA. Now, say I always prefer the latter because you can pick stocks, not just pick from options chosen by your employer, but typically have high fees that really knock your return down. That's for another show. This is where you have to begin the mix of index funds and individual stocks. Remember, I prefer both. There's too much risk in individual stocks to just put together a portfolio of names of your own choosing. So at a minimum, my own demand that you put your first 10 grand of savings from your first job into an index fund. Yes, we've had 100 be my favorites. I've mentioned before. Now, I know that some will argue with this. I see them argument on social media. I don't care. I know that the possibility of one really bad stock hurting your nest egg, even as early as in your 20s, is simply too risky with a nice stock of cash in an index fund. No single stock or even sector can do that. But with the rest of your money behind your first that after that first 10,000 bucks, I do like stocks and I do want you to be diversified. And that's why we play at my diversar around here when we can, where I try to explain what diversification is in a breezy way. It's why we created the CBC investing club to show you how to invest using my chapel trust as an example. Although the trust is a lot of restrictions to prevent me from using the show to juke the stats, as they say, in one of my favorites of the wire. But I can tell you that if you want in-depth work on stocks, I frequently mention on this show the investing club is the way to go. So I set it up because I always talk about buy and homework. I tell you that you need to buy a stock, but then you have to keep up with it. Buy and hold doesn't work. Remember back to earlier in the show when I discussed how hard it was to do the homework? Those trips to the Harvard Business School Library are studying months old research and microfiche. Now it's so easy that I've had to scrap one of my earlier road rules. You no longer need to spend an hour a week studying each of your stocks. Sure, you need to read the cops close. You can Google articles galore. So many that you'll get sick of the process very quickly. You can have articles and research pushed to you along with charts that I only couldn't dream of having 30 years ago. Or you can read what we write at the investing club. Let us help you do the homework. Whatever makes you the most comfortable in your efforts to take charge of your money is what I favor. Remember, I want you to be either a good manager of your money or a good client. I do not have a preference. So let's talk about picking stocks as you get older. It's at this stage when you need to know thyself in terms of risk. Until you get to the late 20s at the earliest, I want you to take tons of risk. Maybe more than you think you can handle. Whether you like it or not, because you've got your whole life to make that money back if something goes wrong. But when you get to your late 20s, all I can do is ask you to think about what you'll do in a sell-off. Do you have the way or thought I'll take a decline of buy more? Or does the sell-off sicken you and make you wish you had no exposure? Can you accept this stocks go down? Not a silly question given how they typically do go up over a period. I'll be able to put your own expo... periodic swings down that are painful. These are crucial questions that only you can answer by yourself. I would like you to take more risk and own more individual stocks than growth characteristics, once you put away that first 10,000 in an index fund. But once you're in your late 20s, I would hate to see you commit more than 20% of your money, your mad money, to speculative growth stocks. As you get older, I want you to capture more income by only stocks that pay dividends. Perhaps add a fund that posts of high dividends than the S&P 500 offers. But don't be too quick to do so. In fact, I wouldn't advise you to start investing for income until your 30s. And even then, you should do it gradually and small. Only in your 40s, so I want you to introduce bonds to your portfolio. Now, in the old days, it would have been hard to resist you to start investing in fixed income by your 30s level in your 40s. But the problem with that is two-fold. For life expectancy, many people are outrunning their fortunes. And the bond market itself, there aren't always a lot of risk-free fixed income alternatives that don't entail a lot of risk. Generally, I'd rather own a high-yielding dividend stock that can raise its payout rather than a 30-year treasury bond that yields, say, 4%. Of course, as you get older, I recognize that most bonds do have that non-caviate after provision. You can and do get your money back. You can't say that with stocks. As you enter your 60s, it's easy to see how you can put up to 50% of your money into bonds and take bonds up to 10% more each decade. That brings us back to the notion of suitability. If you can handle the risk, if you think the stock market is simply not as legitimate an asset class as it once was, good, it is prone to such deep values and what in retrospect look like overblown threats, then I think you have to decide yourself of cashing out or taking stocks to minimum levels is right for you. And I can't blame you if that's the case, because it has been an uncertain asset. The bottom line, it's your life, not mine. So get comfortable with what you can live with, but risk at least until your middle years should remain your best friend. It's different, Craig. I always say my favorite part of this shows me some questions directly from you. In turn, I'm bringing in Jeff Marsh, my portfolio analyst and partner in crime, help me answer some of your most burning questions. Now look, for those of you who are part of the investing club, Jeff will need to do an introduction. For those of you who aren't members, I hope you will, yeah, of course I want you to join. I would say that Jeff's insights in our back and forth help me do a great job and him do a great job for all men, money viewers, but more importantly for members of the club, because this is what we really do. Now, if you like this, be sure to this thing, you know, I mean, like when you go to, like, I went to a restaurant, you had to do it. You know, my kids show me how to do it. All right. So first up, I'm older. First up, we have Tony in North Carolina who asks in a losing position, what is the difference between being stubborn or taking the loss and then revisiting? Okay. Well, this is a fundamental question. See, in the end, what a lot of people confuse is, taking a loss, you take a loss if you find that the fundamentals are deteriorating, you don't take a loss because it's like you can't take it anymore. So I think that this notion of a losing position, if it's a position where things have changed, you should have taken it. We have made the mistake at times of not identifying that there are changes that accompany, but we don't like to view a company as a loser or a winner and a stock is loser winner because some of our greatest picks have been losers. Sure, there's broken stocks, there's broken companies. What you have to identify is that if the issue at hand is a structural issue at the company, structural issue at the industry level, then that you're being stubborn if you hold on for too long. But it could present itself to be a great buying opportunity if you stick with it and the company is able to fix itself up. And we've had those, many of those over time. Now we're taking a look at some of our of your mad mentions. So let's go to Isaac who says, Jimbo, which is what everybody calls me at home, by the way, Jimbo, my whole family loves your show. Thank you. I don't think I bought or sold anything in the past 30 years without checking to see if you said anything about the stock. Now, this is what I love. See, Isaac uses us as a resource, one of many resources. I have never claimed to be the seer. I have claimed. And by the way, someone, someone stop this one and says, you're a great entertainer. Well, I like to entertain to bring people in. I'd like to think that I'm not just a great entertainer. But what I would point out is that I want you to check. You should check. Maybe we've said something. We're input. That's what we are. We are an input. Are we the input? No. But we are an important input, I believe, making stock decisions. Yeah, absolutely. It's doing the homework, showing you how to do the homework so you at home don't have to. Right. So have to, but it's a guiding hand. Look, I always say that if you want, that there are people, a lot of people just need to own index funds. I disagree with that. There are always people going to want to own stocks. If you want to own stocks, watch the show. If you remember the club, you'll be much better at it. Next up, we're taking a question from Rachel in Florida, who says, hi, Jim, we have a 30-year plus time horizon. We had heard some money we don't need to live on. Does Jimmy Vise against investing 20, 25% money into S&P and the rest of the stocks and bonds? Okay, this is really important, right? Now, 30-year plus time rise. Stocks? Yes. Bonds? No. You don't need bonds until you get very old. This is one of the points where I am definitely at odds with most of the so-called Sears out there. I say that when you buy a lot of bonds, you're betting against your life. If you think you're going to pass away, and when you're 72, then it's 65, yes, by bonds. I want people to think, yeah, I know that sounds of almost Pollyanna, but the reason why I say it is because if you have to go into a long-term care facility and you own bonds for the previous 20 years, you're not having enough money. Stocks is strictly the outperformed by us. Yes. 30 years long-term time horizon. The key line too, you're fortunate enough where you don't need to live off that money. That means you don't have the risk of selling it in a potential market downturn. You can stay invested in the market, and over time, you should do quite well. Yeah, I know. Look, I think that when you, it's really a trick question, just people don't really like to talk about mortality. But what really does matter is that if you have a long life and you've cashed in on bonds in your 50s and 60s, you're going to be broke. You'll be broke. As long as you take that horizon, you can ride things out with stocks, and I think you'll have before bonds. Next, we're going to Larry, also in Florida, who has hygiene. Can you touch more on the suitability in general on long-term treasuries for a retired investor? It's definitely now as rates may soon start to decline and offer appreciation thanks. All right. Now, long-term treasuries are offering a very bad mature. They're well under short-term treasuries. That's called a new very yield. I would prefer, actually, to see you in the emberges of the world and utilities. And I say that because I think the treasuries, I think, end up losing money. You lose money. Well, look, another way to go. Cash cows, dividend paying stocks. Yes, much better. They provide income as well. We have to stick with the stocks for the long-term. Anyway, thank you, Jeff. I'd like to say there's always a more market somewhere, and I promise I'd find it just for you right here on M.M. Money. I'm Jim Kramer, and we'll see you next time. All opinions expressed by Jim Kramer on this podcast are solely Kramer's opinions, and do not reflect the opinions of CNBC, NBC, Universal, or their parent company or affiliates, and may have been previously disseminated by Kramer on television, radio, internet, or another medium. You should not treat any opinion expressed by Jim Kramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money disclaimer, please visit cnbc.com/madmoneydisclaimer. Picture this. You're on a John Deere compact tractor. Enjoying the sun as you clear brush across your pasture? You just have to get in the seat. Learn more at jondere.com/getintheseat or visit a dealer near you. [BLANK_AUDIO]