CNBC’s Jim Cramer told investors that losses are an inevitable part of trading and that Wednesday’s sell-off isn’t unexpected after weeks of record highs.
“Stocks have made so many parabolic moves of late that I’m actually glad they’re coming down,” he said.
“Stocks can’t forever go up in a straight line.”
The major indexes tumbled on Wednesday as investors fretted over rising bond yields. The Dow Jones Industrial Average posted its worst day in over a month, closing down 0.96%, while the S&P 500 plunged 0.92% and the Nasdaq Composite shed 1.6%.
To Cramer, the market is prone to pullbacks, “often indiscriminate pullbacks,” after consecutive up days. He compared the market to a garden, saying that while sun is necessary for growth, rain is equally important. Sell-offs are like rain, he added, “both a necessity and an inevitability.” Cramer also reminded investors that the market was able to roar in the 1990s while treasury yields were higher than they are now.
Some of Wall Street’s recent favorites got knocked down on Wednesday, including Nvidia. Cramer asserted that there’s nothing wrong with the stock, it’s just taking a “periodic break” as it has done in the past. According to him, Wednesday’s market action has created some solid buying opportunities.
“Nobody knows how long the sale will last, so don’t miss it,” Cramer said. “Things might be back to full price in a few days, maybe a week or even two.”
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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Nvidia and Apple.
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