Cramer's 'Mad Money' Recap: Taking Control of Your Portfolio

Stocks do not get into the single digits because things are going well, he said. And while many investors may want to speculate on a miraculous comeback or even a takeover bid, the vast majority of stocks under $10 a share are just lethal to portfolios.

Cramer said he only recommends speculating on low-dollar stocks as long as investors know these names can wipe them out. "Don't be taken in by their share price," he said.

Misplaced Love

Cramer said his next rule for investors also comes from his book "Stay Mad For Life," and that's "love the product, not the stock." He said too many times investors think because a company makes a great product, their stock will do great too, and that's just not true.

Cramer explained how in 2006 he fell victim to this rule, falling in love with the stock of Citrix Systems (CTXS), which made the popular GoToMyPC software. Back in 2006, Cramer thought the software was the best thing since sliced bread, and invested in Citrix as a result.

The very next quarter, Citrix disappointed Wall Street by announcing slower- than-expected sales. How could this be? Cramer explained that he was simply too late, everyone who loved the software as he had, already owned it. He was too late. Blinded by the product, Cramer lost sight of the market, of the business, and of Citrix.

Cramer said a great product does not make a great stock. He said "just because you just discovered something doesn't mean millions of other people haven't already discovered it."

Lightning Round

Cramer said he final rule for investors has to do with retirement. "When it comes to managing your own money, nothing is more important than making sure you've got enough dough to retire," he said.

Cramer's "secret weapon" when is comes to retirement savings is dividends.

Cramer reminded viewers that earnings from dividends are only taxes at 15%. That makes certain stocks, which pay incredibly high dividends, likes real estate investment trusts and energy trusts, incredibly appealing for retirement savings.

REITs and energy trusts, like BP Prudhoe Bay (BPT) and Permian Basin Royalty Trust (PBT), are organized as master limited partnerships, meaning they pay all of their earnings out in the form of enormous dividends. These stocks can see yields upwards of 10% to 15%.