Jim Cramer says Fed policy tightening should be low on list of investor worries

  • CNBC's Jim Cramer said Monday that investors shouldn't base every buy and sell decision on predictions of Federal Reserve policy moves.
  • While potential Fed tightening is not irrelevant, Cramer said, other forces are impacting near-term market rotations.

CNBC's Jim Cramer said Monday that investors should avoid the trap of making every buy and sell decision based on predictions of Federal Reserve policy moves.

"When it comes to things you should worry about right now, the Fed tapering its bond purchases, I mean honestly, it should be pretty low on your list," the "Mad Money" host said, describing "endless focus on the Fed" as a "textbook case of lazy thinking."

While potential Fed tightening is not irrelevant, Cramer said, other forces are impacting near-term market rotations. For example, he said the strength of the American consumer is a very important consideration, particularly in a week when heavyweight retailers such as Walmart, Home Depot and Target are scheduled to report quarterly results.

The deteriorating situation in Afghanistan and its broader foreign policy implications in other parts of the world, especially the U.S.-China relationship, also matter, Cramer said. Further, he said Wall Street is assessing the highly contagious coronavirus delta variant and making the judgment that any restrictions on indoor activities will likely be short-lived.

"All I'm really trying to do here is explain that there are many seasons to this market and to not scare you, to not threaten you out of this market, to not make it so you sell good stocks because some chatter about something that's not going to matter a thing to you," Cramer said. "The most important thing to remember is that it's a rotation, or a turn."

Right now, for instance, large companies such as Bristol-Myers Squibb and PepsiCo that have solid dividends are in favor with investors, Cramer said.

"The bottom line: If you really think the whole market's poised to get hammered because of [the Fed tapering] … you should use that to gradually do some buying into weakness," Cramer said. "And you especially want to buy when a stock's getting crushed by a sector rotation."

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