Cramer's 'Mad Money': Staying in the Game

Click here for an archive of Jim Cramer's Mad Money recaps. Click here to get Jim Cramer's Mad Money Post Game video exclusively on TheStreet.com. Editor's note: This recap last aired on Jan. 16, 2009.

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"If you want to use your money to make money, stocks are your best shot," Jim Cramer told viewers of his "Mad Money" TV Show Monday.

He said high-quality, dividend-paying stocks are still the single best asset class over any 20-year period. The key, he said, is to stay in the game, even when every instinct you have tells you to give up.

Cramer said staying in the markets is hard, especially after a big loss. He said there's no magic formula to turn all stocks into winners, so being able to deal with losing a boatload of money is a necessity. Investors need to expect market corrections, not fear them, he said.

Corrections are hard to predict, said Cramer, and investors shouldn't beat themselves up for not seeing them coming. But, he said, if investors treat corrections as a natural part of how the market works, and something they can't avoid, their frustration will be minimal.

Cramer said the thing to remember is to always have a superior attitude and a superior state of mind.

The Right Mix

"If we've learned anything from the market meltdown of 2008, it's that diversification is more important than ever," Cramer told viewers. He outlined 10 steps investors should take to achieve a truly diversified portfolio.

Cramer said investors need to always treat their portfolios as two separate streams, a conservative stream for retirement, and a second for their discretionary portfolios. He said each stream should contain at least five stocks, but no more than 10. Investors should be prepared, he said, to devote at least one hour a week of homework to each stock in their portfolio.