Over the past four years, the stock market has provided investors with many reasons to sell. CNBC's Jim Cramer says that those who resisted the temptation reaped rewards.
Since hitting a bottom on October 12, 2022, the S&P 500 index has risen by approximately 118%, during which time it has experienced aggressive interest rate hikes by the Federal Reserve, a banking crisis, widespread tariffs, and the Iran war. Despite the generally pessimistic market views on inflation and the economy at that time, none of these shocks have been able to stop this upward trend.
"The real lesson is that it seems there is never a perfect time to invest, because bad things do happen quite often, but investing remains the better way to achieve returns," said the host of Mad Money.
The gains brought about by this round of upward movement are quite considerable.
According to Cramer, if one invested $10,000 in the S&P 500 at its low point in October 2022, that amount would now be close to $23,061. Some of the biggest winners in the market have achieved even higher returns. NVIDIA's value has increased by about 1875% during this period, raising $10,000 to approximately $197,505. The stock price of Meta Platforms has risen by 488%, increasing $10,000 to over $58,800. The charitable trust portfolio managed by CNBC Investing Club holds stocks of both NVIDIA and Meta.
For Cramer, a more important realization is not to pick the next market leader, but to continue holding on in times of uncertainty, rather than trying to perfectly time every decline and rebound.
“We simply can’t predict those sharp drops or big rebounds,” said Cramer. “Over these four years, we could have left the market countless times. If we had done so, we would be much poorer than we are now.”
Cramer further discussed in his Sunday column, which he writes for Investing Club members, why he has always stayed in the market. Club Analyst Zev Fima wrote a follow-up article on Monday, using an investment calculator where readers can input their own numbers to see the power of compound interest.
The cost of missing a round of market gains can be quite substantial.
According to data from JPMorgan Chase, if an investor invested $10,000 in the S&P 500 between 2005 and 2024 but missed the 10 days with the best performance during that period, their final wealth would be less than half that of those who maintained a full position throughout that time.
"Stay in the market and continue to buy. Don't lose confidence," said Cramer, "This is the lesson brought by this unstoppable four-year bull market."
Register for CNBC Investing Club now and follow every step of Jim Cramer in the market.
Have questions about Cramer? Call the Cramer hotline: 1-800-743- CNBC
Want to gain an in-depth understanding of the world of Cramer? Contact him!
Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram
Questions, comments, or suggestions regarding the “Mad Money” website? madcap @ cnbc.com
