Jim Cramer Says He's Exercising More Caution at the Start of 2020 - Here's Why

Jim Cramer saw stocks run up 30% in 2019 and thinks a change of tack is prudent for his Action Alerts PLUS charitable trust in the new year.
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Jim Cramer said he thinks a change of tack is prudent for members of his Action Alerts PLUS club as developments from Washington and Iran necessitate a shift.

The ebb and flow of tensions in the Middle East caused the market to fluctuate over the past week, but stocks reached new highs after President Trump initiated a detente and decided against further military action in the region.

Cramer told AAP members that the powerful gains for equities in 2019 make him "less sanguine, more neutral than I was last year."

While the run was good news for markets, Cramer, after a strong bull run in 2019, is a bit more cautious this year.

“I don't like the frantic buying that's going on right here. Maybe it's because they think that January, which has been so strong for three years under Trump, will be no different this time. I find that to be circular reasoning logic and I'm not going to buy it,” Cramer said on his monthly call for members of Action Alerts PLUS.

Cramer lauded Trump’s stance on China and praised the progress he is making on the trade agreement between the world’s two largest economies, but said the president has to be careful in the Middle East.

“If foreign policy was simply talking about China and trade, then I’d be much more positive about stocks for you. But it isn’t,” Cramer said. “Foreign policy is also about the Middle East, which if a president is not careful, can be the graveyard for his or her prospects.”

It has been “a while” since the market has had a sustained pullback, and despite positive signals like a weak dollar and the prospect of a strong earnings season it might be time to start thinking about selling, according to Cramer.

Cramer also told AAP members on the call which stocks he is looking to trim in 2020. Register here to get the inside scoop on Cramer's trades as soon as he makes them. 

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