When volatility is running rampant in the market, it's only natural for investors to ask how they can mitigate it -- without selling out of all of their stocks and giving up on future growth and income. 

As co-managers of the Action Alerts PLUS portfolio, TheStreet's Jim Cramer and Jack Mohr have had to ask themselves the same thing. 

The first thing they did was lighten up on their energy exposure, selling their holdings in  EOG Resources (EOG - Get Report) and Marathon Oil (MRO - Get Report) . This was done to not lower the portfolio's volatility and its risk as oil prices continue lower, Mohr explained. 

They added American Electric Power (AEP - Get Report)  to their holdings, which was a "total de-risk" move, Cramer said. The stock pays a 3.6% dividend yield and is up 6% on the year, outpacing the S&P 500 ETF (SPY - Get Report) , which is down 7% on the year. 

AEP Chart
American Electric Power AEP data by YCharts

If American Electric Power made it into the portfolio for stability, income and low volatility, then Panera Bread (PNRA) is there for growth, Mohr said.

Right now, it's all about repositioning and rebalancing the portfolio's holdings to better adapt to the current environment, he added. Although investors should keep in mind that it's nearly impossible to find the "perfect mix," avoiding all volatility, while keeping high growth and high income in play. 

That's why Cramer and Mohr are looking to certain names to play specific roles in the portfolio. Cramer said Eli Lilly (LLY - Get Report) offers a good combination of growth and income

Another focus? Retail. Cramer said shares of Walmart (WMT - Get Report) have been trading well, while he found the recent earnings results from other apparel companies to be good. 

"I do think that retail is good," Cramer said, adding "we're trying to be in lower beta retail." 

Walgreens (WBA - Get Report) and Jack In The Box (JACK - Get Report) are other stocks that could benefit going forward, while a specific catalyst exists for the latter. Jack In The Box's Qdoba unit should benefit from the closure of Chipotle Mexican Grill (CMG - Get Report) locations on Feb, 8, Cramer noted.

At the time of publication, Cramer's Action Alerts PLUS had a long position in AEP, PNRA, LLY, WBA and JACK.