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Yes, markets are still within in sniffing distance of all-time highs, Cramer said. But the pundits aren’t properly discussing how dramatic any upcoming correction might be.
That's why it’s not time to go to cash. But investors need to keep that option available given the potential destructiveness of systemic risk in the markets, Cramer said. Just look at the 1930s and the recent financial crisis for example of what happens when investors lose faith in financial system.Cramer pointed to other systemic risk factors that underlie the markets. The impact of high-frequency trading is still unknown. Remember the flash crash? These kinds of risks and countless others are endemic in the market, something all investors must recognize and live with. The best protection against this risk, Cramer said, is investing in quality. Finding solid management and financials combined with a long-term vision for growth is the best thing stock pickers can do to protect against systemic risk. The ongoing situation in Iraq is troubling, Cramer said, and it’s possible that the impact on oil prices could jar the markets. But that's why caution is reasonable and panic about an oil-driven correction is excessive right now.