Cramer's 'Mad Money' Recap: Investing Mistakes to Avoid

Mutual Funds

Cramer said he gets a lot of requests for people who want him to talk more about mutual funds.

Personally, he thinks home gamers would be better off spending the time doing the homework necessary to pick individual stocks.

However, for those who don't have the time for stock picking, he recommends getting into a "cheap" index fund that mirrors the S&P, with low fees.

When you invest in a fund, he says, check out the performance of the manager, especially his long-term performance. "Any schmoe can make money in a bull market," he said.

Retirement Plans

Cramer says most investors think of 401K plans and IRAs as boring investments.

But for people who want to live well in their golden years, these investments are important because of their tax savings, he said.

That's because you don't pay taxes on the money that goes in; you don't pay taxes on dividends and capital gains as long as you keep them in the 401K or IRA; and you get taxed only once on the money as ordinary income when it's distributed in your retirement years, he said.

He said investments in REIT stocks and royalty trusts are especially attractive because there aren't any taxes on their dividend yields.

Check out the latest edition of "Cramer's Take on Top-Searched Stocks" on Stockpickr.

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