Market commentator and CNBC host Jim Cramer– who warned that a potential market crash could be the worst one-day decline since 1987’s “Black Monday,”– urged long-term investors to stay the course amid the market turmoil caused by President Donald Trump’s sweeping tariff announcement.
Speaking on Squawk on the Street Thursday, Cramer advised investors to maintain their positions, emphasizing that, like during the financial crisis of 2007-2008, the market would eventually recover.
In 1987, US stock market plunged over 22% in a single day.
“If you were OK in 2007 and 2008, it came back,” Cramer said, referencing the market’s recovery after the financial crisis, as per CNBC report.
He acknowledged that it took until 2013 for investors to recoup their losses but insisted that those with a long-term outlook shouldn’t panic. “If you need your money now, such as retirees or those nearing retirement, you’re in limbo,” Cramer added, but emphasized, “Don’t sell, just hold.”
Reflecting on the current market drop, Cramer described it as a “price-to-earnings ratio lowering event,” suggesting that the decline is offering buying opportunities for savvy investors. He said, “Once that happens, then I think you really have to start thinking, ‘That’s interesting.’ It will get there.” Cramer noted that the S&P 500’s forward P/E ratio is just above 20, down from a trailing P/E ratio closer to 25.
Cramer also shared a personal anecdote, recalling the advice he gave during the financial crisis. “In 2007, I went on the ‘Today’ show and said, ‘If you need any money in the next five years, you should sell.’ That was a great call,” he said.
But Cramer also reflected on his later advice during the market’s recovery, when he famously bought at the “Haines bottom,” a moment credited to late CNBC anchor Mark Haines, who called the market bottom on March 10, 2009.
While Cramer emphasized the difficulty of timing the market, he highlighted the danger of remembering only the sell call from such moments, not the buy call when the market was poised to rebound. “You have to be right twice: first on the sale, and second when you repurchase at the bottom,” Cramer cautioned.
His advice remained clear: Investors should not panic, but instead, view the market’s current volatility as a potential buying opportunity in the long run.
