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NEW YORK (TheStreet) -- Investors can afford to take some short-term pain in order to make longer-term gains, Jim Cramer told "Mad Money" viewers Tuesday.
Don't leave the stock market just because of a few down days. "Sometimes the markets need to come down," Cramer explained, but that doesn't mean there aren't ways to make money.
Case in point, Apple (AAPL), a stock Cramer owns for his charitable trust, Action Alerts PLUS, and that has fallen 5% on what's been widely reported as a "disappointing" quarter. Cramer said Apple is a special situation that must be owned ahead of what will truly be a strong second half of the year.Cramer also made the case for high-yielding dividend stocks. He said these stocks yield far more than U.S. Treasuries. While they may lose a little of their value in the short term, they won't lose a lot thanks to their yields. Stocks including ConocoPhillips (COP), Encana (ECA) and Kinder Morgan Energy Partners (KMP) in the oil patch are all terrific examples, he said. Other high-yielders include Pfizer (PFE) and Johnson & Johnson (JNJ) in the drug sector, tobacco giant Altria (MO) and phone companies Verizon (VZ) and AT&T (T). Cramer also recommended consumer staple stocks H. J. Heinz (HNZ), Pepsico (PEP) and ConAgra (CAG), along with utilities such as Duke Energy (DUK). In the natural gas arena, Cramer said U.S. drillers have finally curbed supply, adding "that's what a bottom looks like." As demand builds, the natural gas stocks can only head higher. Cramer admitted that now is a "defensive moment" in the markets, one when investors may not make many gains until the latest European news can be digested. But that doesn't mean investors need to sit still and it certainly doesn't mean they can't lose a lot less than the other guys.
Off the ChartsIn the "Off The Charts" segment, Cramer went head to head with colleague Tim Collins over the chart of Monsanto (MON), the seed and fertilizer giant most poised to benefit from the record-setting drought in the U.S. While shares of Monsanto are sitting just off their 52-week highs, Collins said the daily chart displays a wedge formation that is bullish for the stock. He felt any pullback should be bought aggressively as the stock has solid support at the $81 level.
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