Cramer's 'Mad Money' Recap: Back in the Game (Final)

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(Story updated to add Cramer's Lightning Round picks, "Am I Diversified?" segment and concluding remarks.)

NEW YORK ( TheStreet) -- Your eyes are not deceiving you: Economic activity is picking up.

That's what Jim Cramer told his "Mad Money" TV show viewers Wednesday. Cramer said it's alright to buy into stocks, as long as investors follow some basic rules.

Making money on companies that you know and love is not a new concept, Cramer told viewers. Before the financial panic made everyone skeptical of just about everything, that's how a lot of money was made, he recalled.

So with long lines appearing again at establishments like Panera Bread ( PNRA), Starbucks ( SBUX) and Apple ( AAPL), which he also owns for his Action Alerts PLUS portfolio, is now the time to buy in?

Cramer said the time is right to get into stocks, as long as investors understand that this method of investing will make some money and lose some money depending on how its done. If you love a company's product and just run out and buy the stock, that's not investing, said Cramer. Investing is doing the homework, finding out if the company has earnings, and whether those earnings are on an upswing, he explained.

If earnings are on the rise, Cramer said investors must next look at the timing. Is it still early in the move, or have you missed the move? "Don't be late to the party," he said, which is why he always recommends buying in stages instead of all at once.

Buy some now, and if the stock pulls back, buy some more. If shares don't pull back, well then you're still in the black and have money ready for the next big market sell-off, he said.

"The retail investor is coming back," Cramer concluded, and it's time to buy American companies with great earnings when the timing is right.

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