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Cramer's 'Mad Money' Recap: Investing for the Long Term

Cramer also advocated his strategy of "playing with the house's money." He said by taking out your initial investment and leaving only the gains, investors can take more risks with what's left. That's the Holy Grail of investing, he concluded, because at that point you simply can't lose.

How to Invest for Retirement

A huge part of long-term investing is investing for retirement, said Cramer. But like all things, there's a right way and a wrong way to approach one's golden years.

Cramer said that conventional wisdom says to simply park all your money into a 401(k) or IRA. While these types of accounts do have many tax advantages, unfortunately most 401(k)s offer options that, well, stink. That's why Cramer suggested investing in 401(k)s only to max out the company match, if there is one, and then into an IRA until those limits are reached.

What should investors have in those IRAs? Cramer said he recommends five to 10 diversified stocks, including high-yielding names that are not master limited partnerships (MLPs) or real estate investment trusts (REITs). He said both MLPs and REITs are already tax-advantaged investments, thus putting them into IRAs invokes additional tax implications that can wipe out any gains.

Instead, Cramer said he's looking for regular companies with great yields and long track records of raising their payouts year after year.

Stocks for Every Portfolio

Some winners are more lasting than others. That was Cramer's next lesson for investors. He said while no stock lasts forever, there are a select few secular growth names that should be in every portfolio.

Cramer explained that most companies need a healthy economy in order to thrive, and that's called cyclical growth. But secular growers can deliver fantastic earnings even in a lousy economy and keep powering higher year after year.

How can investors find these elusive winners? Cramer said by sticking with long-term trends, like the move towards healthy eating. That trend has worked well for names such as Hain Celestial (HAIN), said Cramer, just as the smartphone revolution gave Apple (AAPL) years and years of unparalleled growth.

Cramer said that investors can hold onto secular growers for as long as the story remains intact. That can be a very long time, he added. But investors need to realize that even the hottest of trends, like Apple, will eventually come to an end and investors need to be prepared for it when it comes.

What's in a Name?

Cramer's final thought for investors: Don't get hung up on nomenclature. He said there's nothing virtuous about being a "long-term" investor.

In recent years, the notion of trading has become loaded with negativity, but in the end we're all here to make money. If that money happens to come in a hurry rather than taking the years you were expecting, take it!

When you go to the bank, they don't ask whether you made your money short term or long term, they take it either way. If you need to take action with your investments on a more frequent basis, do so.

Just always remember to stick with your discipline, do your homework and stay on top of your portfolio, he concluded.

To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

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

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

Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC
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, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of 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, 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 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, 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, 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 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, 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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