The S&P 500 index may have dropped 4.3 percent from its Sept. 19 record peak, but that doesn't mean it's time to give up on stocks, says
CNBC commentator Jim Cramer.
"You simply can't make enough money in any other asset class to be able to retire without owning stocks," he explains.
Cramer offers a simple test to determine whether their stock portfolio is sound. "Know what you own," he insists. "Describe it to me. Tell me what it does and why you bought it, and give me a three-sentence pitch about why it's good."
If you can make a clear case as to why your holdings are solid stocks, your portfolio should be a-ok, Cramer states.
To be sure, don't go nuts buying different stocks during the correction, Cramer said. "Unless you're running a mutual fund, there's no reason to own a large number of stocks," he argues.
Rather, "I want you to hold between five and 10, but not more than 10, high-quality, diversified names."
Not everyone shares Cramer's enthusiasm for stocks at this point.
"Investors have become a bit more cautious about earnings and about the pace of global growth," Kate Warne, a principal at Edward Jones, tells
The Associated Press. "That reassessment is leading to a bit more caution on stocks."
The International Monetary Fund Tuesday revised downward its estimate for global economic growth next year to 3.8 percent from 4 percent previously.
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