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NEW YORK ( TheStreet) -- Don't bet against this economy, Jim Cramer said on "Mad Money" Wednesday. He told viewers they can no longer afford to stay complacent. If you own a stock solely for its high dividend yield, it's time to start taking some profits.
Cramer said he can't blame the droves of investors who have piled into high-yielding stocks over the past few months. He said the Federal Reserve created the perfect environment with low interest rates for high-yielding stocks to thrive. There literally has been no competition from bonds, he said, which made stocks the only appealing game in town.
But with the housing market rebounding sharply thanks to a shortage of homes, the reign of big dividend payers may be coming to an end, Cramer continued. He said the strong housing report this week sent the utilities, REITs and master limited partnerships down sharply yesterday and the selling continued with the high-yielding drugs, foods and consumer products stocks today.The data from the economy are getting too good, said Cramer, and investors can no longer afford to ignore them. The market has begun pricing in higher interest rates, which means investors need to start taking profits and wait for yields to rise before considering buying back into these stocks that have been such a safe bet for the past few months.