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Jim Cramer's Lesson for Investors This Week: Use Limit Orders

The stock market's volatility over the last two days provides valuable lessons for investors, according to Jim Cramer, portfolio manager for Action Alerts PLUS.
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The stock market's volatility over the last two days provides valuable lessons for investors, according to Jim Cramer, portfolio manager for Action Alerts PLUS. Cramer recommends that investors use limit orders to protect themselves in selloffs, rather than market orders. 'You can't use market orders. The markets don't work really, they don't have the capacity in high volume moments,’ explained Cramer. ‘Forget the SEC and what they may say, or all the reassurances from different people who work at the exchanges. And protect yourself, use limit orders.' Cramer added that limit orders can ease investors’ worries in times of market turmoil. 'Stop trying to think that it's perfect. It's not perfect, it's caveat emptor. So use limits, and then you don't have to worry about buying a clunker.’

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