How much swing is too much swing? Take a gander at how well your mutual fund did after the


rate cut. Did it go up more than 20%? In one day? And then ask yourself whether you are comfortable with that.

How much a fund swings is one of the chief worries that I had as an investor and a money manager. I think it is perfectly fine to have, in a portfolio of funds, one or even two funds that swing like that. But I know from working with the wealthiest of the wealthy that they didn't get that way swinging for the fences.

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and I used to debate this notion for hours at my old hedge fund. What is the right amount of risk to take? What is the right amount to swing for? We almost always ended up referring to baseball. I know it is out of season, but we loved sports analogies, and we thought that if you had too many home run hitters in the line-up and not enough on-base guys, you may not score enough runs.

This week saw some of the most dramatic swings in history. While everyone recognizes how great the market acted after the Fed rate cut, the damage that Tuesday's decline caused made it so that the

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index still isn't in the black. That's worrisome. That says to me that you should look at your mutuals and make a decision to take out a home run hitter and put in a singles fund. I am bullish as all get out, but I recognize that it is not in most people's constitutions to accept such radical swings. If you can't, particularly if you are older, and you might need that money to spend out of your IRA or 401k sooner than you would like, make the change. You won't regret it.

James J. Cramer is a director and co-founder of He contributes daily market commentary for the network of TSC sites and serves as an adviser to the company's CEO. Nonstaff contributing columnists for and, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While he cannot provide investment advice or recommendations, he invites you to send comments on his column to