Now More Than Ever, Trade Safely

Flight out of safety! Should you join it? No, not unless you decide that everything's rosy. I say, stay diversified! Do not give up on safety. The stock market is predicting that happy days are here again, and everything safe is being sold.

You see it: Coke (KO - commentary - Cramer's Take), Procter & Gamble (PG - commentary - Cramer's Take), etc. Don't sell. Here's why. You need some of these, because we don't know if employment is going down big, and we don't know if China is going back, and we don't know if the Democrats fight the plan, and we don't know if companies are going to preannounce.

Instead, I would be lightening up on some of the natural gas stocks that have spiked gigantically but natural gas has done nothing, I would trim there. I think that some of these could be up because of a short squeeze in the Oil Service HOLDRs (OIH - commentary - Cramer's Take)OIH -- not related to the coxswain!

I also think that the rush into the homebuilders now, after the big run, is misplaced. Here's a group that has correctly anticipated a lot of the news and now has to rest, not run again.

Would I buy PG here? I think it is like anything else: You buy a little, and if the rotation goes on next week, you buy more.

But I have been sitting here, for example, and thinking, should I buy more Deere (DE - commentary - Cramer's Take) for Action Alerts PLUS? Should I be picking at Freeport-McMoRan (FCX - commentary - Cramer's Take), with the hope that China comes back?

I don't know. I have bought stocks up 5 before, and there have been periods where it worked.

But there have been ten times more when it didn't work. It is tempting, because the Baltic Freight Index is up four days in a row, which means, of course, that China is coming back. However, these stocks could come down, and I don't want my first buy up huge.

If you stay diversified and buy safety when it is down and sell stocks that are up huge, you will be in shape to buy again.

At the time of publication, Cramer was long Deere, Freeport-McMoRan and Procter & Gamble.

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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

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