Cramer's 'Mad Money' Recap: Using the Right Investment Tools

More often than not, however, stocks under $10 a share are tiny names that you've probably never heard of. These may be fads or companies that are mere shells of their former selves. But that doesn't mean there aren't diamonds in the rough out there if you know where to look.

Stay Close to Home

Back in the old days, part of diversification used to mean owning a foreign stock, Cramer told viewers, one with exposure to the red-hot emerging markets.

But with fiasco in Europe crushing all things international, the tables have turned, making stocks firmly rooted here in the U.S. look pretty good by comparison.

That's why part of the new diversification requires one stock that offers domestic security, anything that is USA all the way.

Cramer said that could be a phone company like AT&T (T) or Verizon (VZ) or a utility such as Consolidated Edison (ED) or Duke Energy (DUK), all of which are also high-yielders.

But investors could also choose a regional to national restaurant chain like Dunkin Brands (DNKN) or a real estate investment trust like Federal Realty Trust (FRT) or Tanger Factory Outlets (SKT).

Cramer said the bottom line, is investors need to be thinking about all-American companies for the foreseeable future.

All That Glitters

Cramer's last tip for investors is to always include some gold in their portfolios. Gold, he said, has a special property that makes it precious -- it goes up when everything else is going down. It's insurance against economic uncertainty, geopolitical chaos and inflation. Cramer said to think of gold at stock insurance, just as valuable as homeowner's or auto insurance.

Gold has been the best performing asset class year after year for the past decade, racking up gains consistently at a time when just about everything else has been disappointing. Owning gold, said Cramer, is not just about the upside, however: It's also about minimizing the downside.

Cramer put a spotlight on the SPDR Gold Shares (GLD) exchange-traded fund as his favorite way to invest in gold. For investors who can afford to buy larger quantities of gold, owning gold bullion or gold coins is also a wise choice, he added.

But beware of the gold mining stocks, Cramer cautioned. While these companies benefit from the increasing scarcity of the precious metal, they also encompass countless ways to screw things up, costing investors dearly.

"If you want exposure to gold," Cramer concluded, "do the easy thing and buy the GLD."

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-- Written by Scott Rutt in Washington, D.C.

To email Scott about this article, click here: Scott Rutt

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At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC Universal or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

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