Editor's Note: The following are questions received from viewers of "Mad Money," seen every day at 6 p.m. EDT on CNBC.

I only have about $1,000 to invest, and have no idea how to start. What do you suggest for someone who is new to the stock market?-- Trisha from Tallahassee, Fla.

James J. Cramer

: First of all, don't be scared of starting out investing with too little money. That said, even in the era of discount brokerages, the best and most cost-effective way to maintain a diversified portfolio with less than $5,000 is with mutual funds. First, I'd read all I could find online, and there's a lot of useful information for free out there on sites like


, Yahoo! Finance and Morningstar. When you feel comfortable enough, use one of the free mutual fund screening tools out there to find an investment vehicle that best fits your goals.

Should I continue to buy Metris (MXT) if the Fed keeps raising rates?-- Darren from California

James J. Cramer

: Metris is one of my top picks in the credit card space. I think the company is a solid acquisition target now that its fundamentals are improving and management is paying down a substantial portion of debt. Following this morning's acquisition of




Bank of America

(BAC) - Get Report

, I think the company could be the next name to catch some takeover speculation.

Are you still bullish on Altria(MO) - Get Report?-- Pete from Idaho

James J. Cramer

: I like Altria here at just 12.7 times estimated earnings and I own shares for my charitable trust. (To see all of the holdings in my charitable trust, visit

ActionAlertsPLUS.) The company has announced preliminary plans to break the firm up into four separate companies, and I think shares could be worth more than $80 when each business is valued separately.

What is your take on Cisco(CSCO) - Get Report?-- Sue from New York

James J. Cramer

: Cisco has been out of favor on Wall Street for some time. But I expect a round of new technology product launches and increased adoption of high-speed data services to breathe some life back into this tech behemoth in the second half of this year. I think Cisco is a buy at this price.

Would you pick up Duke Energy(DUK) - Get Report with extra cash?-- Christina from Brooklyn, N.Y.

James J. Cramer

: Even though the stock is trading at a 52-week high, up 18% for the year, Duke remains my favorite utility stock. CEO Paul Anderson has done a great job turning the business around, and the recently raised 31-cent quarterly dividend (4.1% yield) is above the industry average.

I'm trying to build a diversified portfolio. How do I determine if a stock is a "trade" or an "investment"?-- David from Charlottesville, Va.

James J. Cramer

: This is a good question, but the answer isn't as simple as "all large-cap stocks are investments," or "all tech stocks are for trades." Rather, before making any investment in the market, you should have a target price in mind and know what catalysts it will take for the stock to get there. For example, if you buy a stock a week ahead of a company's earnings report betting on a good number, you should close out the position soon after the report, whether it's a winner or not. The worst mistake an investor can make is to turn a trade into an investment. A diversified portfolio will have a combination of positions with both long-term and short-term expected holding periods.

You've been making some negative comments lately on the energy tanker business. What's not to like about the 14% dividend yield at Knightsbridge Tankers (VLCCF) ?-- Mark from Palm City, Fla.

James J. Cramer

: A number of companies in the tanker business have copied the Real Estate Investment Trust (REIT) or Master Limited Partnership (MLP) model, where they pay out a large percentage of their earnings as dividends. That said, I expect declining shipment rates to hurt both earnings and dividends in the coming quarters, and that could lead to share-price declines that will offset the sizable yield.

What metrics do you use to decide if a company has a good balance sheet?-- Joe from South Carolina

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James J. Cramer

: There are many items I look at, but the two most important are cash and debt. Cash truly is king, especially with speculative stocks, because investors will be in big trouble when there's no money left. On the debt side, calculate the ratio of short-term and long-term debt divided by shareholder equity, and compare it to the company's peers. A good balance sheet will have a relatively low and/or declining debt/equity ratio.

I own Altria(MO) - Get Report, Oracle(ORCL) - Get Report, Duke Energy(DUK) - Get Report, Citigroup(C) - Get Report and SBC Communications (SBC) ... am I diversified?-- Peter from Vero Beach, Fla.

James J. Cramer

: A tobacco/food producer, a software company, a utility, a financial and a telecom stock ... yes, you are diversified!

At the time of publication, Cramer was long Altria.

James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

Action Alerts PLUS. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by

clicking here. Listen to Cramer's RealMoney Radio show on your computer; just click

here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click

here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click

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here to order Cramer's autobiography, "Confessions of a Street Addict."