Mad Money w/ Jim Cramer 12/31/25

Summary

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Mad Money w/ Jim Cramer (1/1/2026) — “Suitability: Making Investing Personal”

Episode Overview

This episode of Mad Money is a masterclass on "suitability" in investing—matching your investments to your personality, risk tolerance, and stage of life. Jim Cramer shares personal stories from his early days at Goldman Sachs, offers practical advice tailored to different ages, and fields listener questions, always circling back to the vital importance of understanding yourself before you invest. The episode weaves in anecdotes about learning from loved ones, the pitfalls of blindly taking tips, and concrete steps for building wealth from infancy to retirement.

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Key Discussion Points & Insights

What Is Suitability? (Starts at 01:52)

• Definition: Investing in stocks or funds that match your age, temperament, and financial goals—not just short-term trends.
• Origin: Cramer recalls learning the term at Goldman Sachs: “He asked me did I ever consider that many people who called me might not be ready for the stock of the hottest semiconductor company in the land... Suitability, was it suitable?” (06:59)
• Caveat emptor (buyer beware) is outdated; today’s investors must be diligent and self-aware.

The Hard Part: Stocks Are Not Like Any Other Product (06:34)

• Unlike cars or houses, stocks can't be returned, and your losses are not insured. “You can't go back to your broker and say, ‘Hey chief, you never told me this could happen. I'm down 300 bucks... I want my money back.’ Sorry. Caveat. Empty.” (07:00)
• Suitability means knowing you’re truly comfortable accepting this risk.

Technical Analysis & Investment Decisions: Lightning Round Q&A (08:47–11:30)

Caller: Kyle in New Jersey — Chart Data Use (09:08)

• Q: Do you look at RSI or MACD when buying or selling?
• A: “I look all the time... I do not like to buy stocks where the chart is bad... anything that's important to others is important to me.” (09:17)

Caller: Mark in New York — Profit Taking in IRAs (09:37)

• Q: Should I take profits in my IRA and reinvest later?
• A: “Let it run unless the stock is really sour... keep investing in your IRA. That’s the best thing you can do.” (09:51)

Caller: Nick in Florida — Kids' Investing Start (10:14)

• Q: Lump sum later vs. investing early for kids?
• A: “Give them half in index funds, half to learn... Start early. Compounding is powerful.” (10:38)

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Suitability by Age: From Infants to Retirees

For Babies & Kids: Foundations of Wealth (12:57–18:52)

• Start early: “Open up accounts for them or at least give them some shares of stock so that from the earliest moment, you can start the process of saving.” (13:07)
• Index Funds for Newborns: “I'm partial to cheap ETFs that mirror the S&P 500.” (13:19)
• Dividend Stocks + Growth Stocks: “Pick two: one with a dividend (e.g., Procter & Gamble, PepsiCo), and one high quality growth stock (e.g., Apple, Nvidia, Tesla, Meta).” (14:21)
• UGMA/UTMA Accounts: Great for gifting, but watch out if your kid may seek financial aid for college. (15:20)
• Unconventional tip: “Buy gold or silver coins for your kids... They may or may not increase, but they’re insurance for crazy times.” (15:52)
• Bottom line: “No one has ever regretted saving too early for their kids.” (17:48)

For Kids: Turning Curiosity Into Habits (20:16–26:43)

• Personal anecdote: Losing family savings on a “hot tip” (National Video) became a life-long lesson—buy what you (and your kids!) know, not just what’s “going up.”
• Advice: Let your kids invest in shares of companies tied to their actual experiences/toys (e.g., Mattel, Hasbro, General Mills, Disney, McDonald’s, Chipotle).
• Cramer’s “Goofus and Gallant” lesson: “Bottom line: please buy your kids a few shares in a name brand that they know and you know. Something they can see and hear and touch.” (25:24)

For Teenagers: Listen Closely to Their Trends (30:54–34:31)

• Personal story: Stock picks inspired by his daughters’ consumer behavior (Domino’s, Apple, Google, Meta/Instagram, Chipotle).
• “Kids don’t want to talk on the phone—they want apps. That’s why Domino’s was a tech company that sells pizza.” (32:11)
• “Invest with them and you will not regret it. Trust me.” (34:24)

Young Adults: Save, Index, Diversify, Then Add Stocks (34:51–41:45)

• In your 20s: Don’t fret about saving during college—focus once you start working.
• First $10k: “Put your first 10 grand... into an index fund.” (36:00)
• After $10k: Diversify with individual stocks, but “at a minimum I am demanding an index fund base.”
• Risk profile: Take more risk early—“until your late 20s... I want you to take tons of risk... you’ve got your whole life to make that money back.” (38:34)
• Begin shifting toward dividend stocks/income in your 30s and bonds only in your 40s.

Later Years: Shift Toward Income & Stability (41:00+)

• Increase bonds as you age—up to 50% in your 60s, adding 10% per decade.
• But “if you have a long time horizon, stocks outperform bonds.”
• “If you want less risk, if the stock market feels unsafe, it’s your life—do what’s comfortable.” (41:24)

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Memorable Quotes & Moments

• On suitability:
  “Caveat emptor, no. Just buyer be a little more aware of what you might be committing your hard earned dollars to when you purchase a stock.” —Jim Cramer (08:22)
• On teaching kids:
  “If my father had bought shares in a nice dividend stock for me—3M rather than National Video—we might have been able to not have to lose the grape juice, had to put water in the grape juice.” (27:50)
• On letting winners run in retirement accounts:
  “Let it run unless the stock is really sour... keep investing in your IRA. That's the best thing you do.” (09:51)
• On compounding:
  “A high yield stock can double the value of that investment by the time your baby turns 10.” (17:24)
• On kids as investing guides:
  “The innate consumer wisdom of my two daughters... many [investment] ideas have come from young people, children, stepchildren. Their likes and dislikes can tell you a great deal.” (31:56)
• On bonds for young investors:
  “Stocks, yes. Bonds, no. You don't need bonds until you get very old. I say that when you buy a lot of bonds, you're betting against your life.” (44:00)

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Notable Q&A and Advice (with Timestamps)

• Why buy stocks when Treasuries yield 5%?
  “Six months from now those rates may be lower... the stock market has far exceeded longer term anything that you're going to get in the short term.” (26:53)
• Technical analysis resources for amateurs?
  “Google Larry Williams. His stuff is the best... In the end, technical analysis—it must be done.” (27:55)
• When to take a loss vs. being stubborn (with Jeff Marks)
  “You take a loss if you find the fundamentals are deteriorating. You don't take a loss because you can't take it anymore.” (41:45) Jeff Marks adds: “There's broken stocks; there's broken companies. If it’s a structural issue, that's when you're being stubborn.” (41:45–42:03)
• Big inheritance with a 30-year timeframe—OK to allocate 20–25% to S&P and rest to stocks and bonds?
  “Stocks yes. Bonds no. You don't need bonds until you get very old... As long as you take that horizon, you can ride things out with stocks.” (44:00)

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Segment Timestamps (Major Content Only)

• 01:52–08:47: Suitability, caveat emptor, and personal stories on learning the concept
• 08:47–11:30: Lightning Round call-in questions (technical analysis, IRAs, kids investing)
• 12:57–18:52: Investing for infants and children (index funds, UGMAs, dividend/growth stocks, gold)
• 20:16–26:43: Teaching kids through relatable stocks; the dangers of tips and lessons from board games
• 26:43–27:55: More Lightning Round: Treasuries vs. equities, technical analysis resources
• 30:54–34:31: Investing wisdom from teenagers and young adults; tech trends from family
• 34:51–41:00: Suitability across adult life, risk profiles, the right time for bonds
• 41:00–45:12: Q&A with Jeff Marks on loss-taking, research resources, and long-view allocations

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Conclusion

Throughout the episode, Cramer hammers home that investing success starts with self-knowledge—knowing your own temperament and needs, not just chasing trends or expert tips. Saving early, educating children, incrementally embracing risk, and gradually shifting toward stability as you age all form part of his suitability playbook. And above all, use every tool—family wisdom, technical analysis, index funds, and research—to find what truly fits you.

“It's your life, not mine. So get comfortable with what you can live with. But risk, at least until your middle years, should remain your best friend.” —Jim Cramer (41:24)

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Transcript

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[Jim Cramer]

Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. I've been my friends, I'm just trying to make you a little money. My job is not just to entertain and educate, but I want to teach you and explain. And tonight I'm doing it. So call me at 1-800-743, CBC or tweet meyimkramer we too often invest for the day. I always hear people talk about what's working at the moment. In the old days when the great Marcanes ruled the mornings around here, I remember that each time I co hosted he would introduce me as Reverend Jim Bob from the Church of what's Happening Now. It was fun. Back then it seemed like everyone was running their own personal hedge fund. There was an understanding that a stock could be here today and going tomorrow and everything was fine. Everyone was fine with it. Those days are over though. And if you recommend a stock for a trade, even if you say buy it today for the analyst meeting tomorrow and then you sell, there will always be a video YouTube kicking around shows you like the stock but never gave the sell Call. So we've gone beyond that. We're all about educating you to be a better investor. The same thing we do every day at a higher intense level. At the CNBC Investing Club that I want you to join tonight. I want to introduce you to this concept that is so important and it's called suitability. Basically, what stocks fit you, what investments are right for you, not for this week, not for this month, but for your age, for your temperament. I first heard of the concept of suitability when I was in training at Goldman Sachs for the group that helped small institutions and individuals now called Private Wealth Management. I've been buying individual stocks for myself and others for a half decade before I got to Goldman in 1983 as a summer intern. At the time I was watching Financial News Network between classes at Harvard Law School that was the predecessor to cnbc. Whenever I could, I'd run over to the Harvard Business School library where they had all these old research reports from long gone firms like Baish and Lehman about stocks totally on a catch is catch can basis. Those of you who grew up with the Internet have no idea how hard it was to access information in the 80s. If I liked a company, I would have to ask the librarian for a microfiche of the firm's SEC filings. Do they still have microfiches? These were little pieces of plastic that you stuck into a machine and you read the files. All which were usually six months old by the time I got them. Everything I did back then is online now and instant and updated. The imperfections in the market back then were legion. Now everyone can know everything. More on that later tonight. I spent all week trying to find one stock that I thought would work. One stock that would be good for a week where anyone who wanted to invest could take the idea. And then I changed my answer machine. Yes, my answer machine. Another thing we got rid of. I changed the message to a 20 second rap on the stock. Don't know answering machines. Can you imagine? Well, some company used to make them with all those jobs wiped out by your cell phone. Same with the entry services for that matter. Talk about jobs that aren't coming back. Anyway, I'd say. Hi, this is Jim. I'm not here right now, but I like both the chart and the recent numbers from People Express, a long since bankrupt airline that I used to get down to New York for job interviews. My best one, a recommendation for Monolithic Memories. A smoke show of a company with a red hot stock that was run by a guy named Zev Drury who two Decades later helped save Tesla back when it was struggling during the financial crisis. He was the last CEO before Elon Musk. Anyway, Monolithic shot up like a rocket that we can only ended up being acquired by Advanced Micro Devices at a very big premium. It was the best Kramer's not at Home call this machine hit I had ever had and believe it or not, Jim is not home became a rallying cry for lots of people who were calling me back then, hoping I wasn't home so they could get the tip without having to interact with me. Not long after I got a job at Goldman Sachs, one of the officers at the firm called me in and got the machine with this rec. He heard the recommendation. He told me to call as soon as possible. I did and he asked me if I knew what suitability was. I had no idea. So he introduced me to the concept. He asked me did I ever consider that many people who called me might not be ready for the stock of the hottest semiconductor company in the land and that I was recommending it to them one on one without any sense of it, whether it was right for them? Suitability, was it suitable? I said I always thought the stocks were pretty much a caveat empty situation. We all know that unlike say vacuum cleaners, you can't take stocks back to the store, get a refund and they come with no guarantee. So what's the deal? This executive hammered it into my head that before you recommend a stock on a one on one level at a registered brokerage house of all places, you had to know what that person wanted out of what did they want from stocks? You had to know if the stock was right for them and for their level of risk tolerance. Monolithic memory, she said, wasn't exactly right for anyone other than the most risk seeking investors out there, the financial equipment of bungee jumpers. So let's start there. Today I want you to ask yourself, what is your tolerance? How much risk do you want out of a stock? You see, stocks are pretty peculiar pieces of merchandise when you think about it. You buy a car and you know it's not worth as much the moment it leaves the lot, Correct? But there are all sorts of warranties. You buy a house and you know it could burn down the next day. However, you can buy before you buy it. You get a binder with insurance. So if it does burn down, you can get your money back. Clothes can be returned, devices, return phones, PCs, washers, dryers, you name it. But stocks, if you buy a share of Nike and the next day Goldman Sachs downgrades it. And then a day after Foot Locker says there's been a slowdown in Jordans, you can't go back to your broker and say, hey chief, you never told me this could happen. I'm down 300 bucks on 2,000 shares and I'm out of six. Hey, man, I'm losing too much money. I want my money back. Sorry. Caveat. Empty. Now, back then, when I got started, it would have been incumbent upon the broker to recognize that the buyer would know these things could happen. Maybe the broker should never have been recommending that stock to begin with. You get the point though, because you can't take stocks back and get the same price because there's no real insurance. Although you could buy an expensive put option underneath with a cost that lowers the risk of Nike pretty dramatically and has to be renewed constantly. Suitability is incredibly important. Important. That's why for the next hour, you're going to learn how to measure your own tolerance versus a variety of factors. Because these days with digital brokers, there's no real protection, just a signed form that says you get it. You may not know what you're getting into tonight. The bottom line, that stops here. By the end of this show, you'll know what suits you and what doesn't. No matter what your age or your style. Or to put it that another way, caveat emptor. No, just buyer be a little more aware of what you might be committing your hard earned dollars to when you purchase a stock. Let's take calls. Let's go to Kyle in New Jersey.

[Caller]

Kyle, best friend, Jim Cramer. How are you, buddy?

[Jim Cramer]

I am good, Kyle. Thanks for calling. How can I help you?

[Caller]

So I was wondering, first of all, I am an investment club member and this is my third time talking to you, man.

[Jim Cramer]

Terrific.

[Caller]

And I feel like I know you personally.

[Jim Cramer]

I love you to death. Thank you.

[Caller]

I would like to know how often you look at RSI or MACD data when you're buying or selling a stock.

[Jim Cramer]

How to look at the. Hit the relative strength index on the back. I have to tell you, I look all the time. I do not like to buy stocks where the chart is bad. It's one of the reasons why we do off the charts on Tuesdays. I think it's incredibly important, Kyle, because others do. And anything that's important to others is important to me. Mark in New York.

[Caller]

Mark, what is up? Jimmy, Chill, chill, man.

[Jim Cramer]

Here, what's happening?

[Caller]

I have an IRA account for my retirement and I was wondering if it's okay to Take some profits and then reinvest the cash in my account at another time.

[Jim Cramer]

Well, you know, I prefer you to let it run unless the stock is really sour because I just think I don't want you member investing for the long term in ira. And I have to believe that what you saw in the stock is continued. Otherwise, look, if you have to take a loss, take a loss, but keep investing in your ira. That's the best thing you do. Let's go to Nick in Florida, please. Nick.

[Caller]

Jimmy, chill. My question when you help your children invest, is it more important to save up and give them, say, a big snowball, a big lump of money when they get married or set them up early, literally an infant pay the baby with, say, a small amount in dividend stocks to rephrase it in such a way, which is more important, the size of the snowball or the height of the hill that compounds it?

[Jim Cramer]

Wow, I love that. Well, first, I can't help my kids. They have to do that in their own. Because of my job, I'm not allowed to know what they're up to. But what I always say to my kids is that, look, I want you to go make as much money as possible with half the money and the other half, I want you to do index funds and go learn some stocks. I think when they finally decide what they're going to do with their lives, they can do it. But that's my advice to them. Now, I don't know what they own because that wouldn't be right. By the end of tonight's show, I hope you'll know what suits you and what doesn't. No matter what your age or your investing style. Tonight I'm helping you form the necessary investing strategies you need at all stages of your life, from young to old. Just like the gentleman we just talked to. I'm going to meet you where you are and you take you where you need to be. So stay with Kramer.

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[Jim Cramer]

What made you confident that you could do something that hadn't been done before? I have no fear of failure.

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[Jim Cramer]

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[Jim Cramer]

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[Jim Cramer]

Tonight's all about you. About knowing what you can and can't do because it's not right for you, because it's not suitable. Now, there are all kinds of suitability considerations in the business. First and foremost, there's age suitability. I want to start with kids, particularly babies that money's been on so long now that there are kids who were born, who are in their teens or and if their parents listed my best pitch when we got started, they'd already be well on their way towards some great wealth. Parents, grandparents, listen up. You can give all sorts of things to families that just had babies. I want you to open up accounts for them or at least give them some shares of stock so that from the moment, the earliest moment, you can start the process of saving. Now here's my commercial for something that doesn't need a commercial because almost every expert you hear from is in love with them. I'm talking about index funds, which aren't perfect, but they're the best way to go if you want to put your money on autopilot. And you can't spend a lot of time looking at individual stocks just to buy a better the whole market. So if you just had a kid, you can take a couple of hundred smackers and buy some shares in an index fund for them. I'm partial to cheap ETFs that mirror the S&P 500, because those 500 stocks represent the bedrock of America's publicly traded companies. As a companion, I like any sort of total return fund that has an even broader array of stocks. A mix of both, I think, is a terrific way to start. Your broker or the brokerage site you use might have some fund that's higher growth, a junior growth fund, and that could be a nice augmentation because you're buying for an infant who's got his or whole life ahead of him. The whole life. These kinds of things can really compound over time, meaning if you let it run, then money can build up on itself. Now you might say why am I watching a show about stocks of all this guy's doing is talking about index funds. Look, I could come out here every night and talk index funds, but it wouldn't make for a very interesting show, would it? I wouldn't be giving you my best advice either. I teach you how to pick individual stocks. Both here, but really a huge amount in the CNBC investing club because I believe that is the most effective way to go. And I like to teach in the investing club. It's my favorite venue. I think you can build a portfolio yourself that can do better than most professional money managers or index funds. You can control your own money. But I'm perfectly sanguine about the notion that stock picking and index funds fund investing can coexist. I just wish the proselytizers of index funds weren't such fundamentalists about how bad everything else is. So I say let's give both a try. When you're saving for your kids, definitely start with an index fund. Now what's a good stock for a kid just born? I think that you should pick two kinds of stocks for your children. One with a dividend where you can reinvest those dividend payments. Get the power of compounding. That is such a good thing to teach people. We often hear the term dividend aristocrats. Companies that have long histories, certainly more than 25 years of increasing dividends. La bomb. It's hard to go wrong with the big well run consumer package. Good place here. I'm talking about a company like Tried and True, Procter and Gable, PepsiCo. The best way to find out my absolute favors as soon as possible is to join that CMC investing club I've mentioned and watch what we do with the travel Trust. At the same time, you also want to give your kids something with a little more juice like the great growth stocks of an era. I mean I'm talking about the apples, the Nvidia's, the Tesla's, the Metas. Now if you do set up an account for your kids, may I please suggest going with a uniform gift to minors act account. I'm going to call it UGMA for short. Okay, Ugma, the rules keep changing for these, but suffice it to say that you can gift children money that can accumulate somewhat tax free over time. Again, the rules have changed so much from when I set up the mutual fund for my kids through tax favorite gifts. I love them because they were like trust that you didn't need lawyers to create. Check with your broker for the latest rules for you in the state you're in. They do differ. I think it's one of the better tax breaks around though. I know hunting for tax breaks may not sound very exciting, but that's how you take care of your family. Besides, who doesn't want free money? There's one caveat with these UGMA accounts though. If your kid is planning to get financial aid in college, you want to be very careful because that UGMA money can count as theirs and might get them disqualified depending on the institution. One other thought I like. You know I believe that gold is a terrific insurance policy for any portfolio. I'm going to talk more about this later tonight, but a highly unusual yet totally blessed by me idea is to buy gold or silver coins for your kids or or just pieces of gold or silver. I bought slivers of slivers for my kids from a dealer. Pretty much forgotten about them. They may or may not increase. These are polar opposites of growth or income stocks. They don't throw off money, they don't do anything. But in crazy times when inflation comes roaring back and we now know it's certainly capable of happening. Good. Pretty high levels not seen since the 80s. There's nothing that's hold up in value under the scenario better than mansions, masterpiece of art and precious metals. One caveat. If you do this, remember to put the gold or silver in a safe place please. That does not mean putting it on our masters and it certainly doesn't mean putting a hole in the ground in the backyard. A safety deposit box more my style. So the bottom line. When a child's born, think about setting up a uniform gift to minors account and put index funds or individual stocks in there. Specifically I like cheap et cetera ETFs that mirror the S&P 500. And on the stock side, your kids will want at least one dividend stock. Give them one dividend stock for income because a high yield stock can double the value of that investment by the time your baby turns 10. You also want one high quality growth stock that you believe in for the long haul because those can rack up big gains. Don't put this off. This must be done at the earliest moment to get the most involved for your brand new loved one. No one has ever regretted saving too early for their kids. Net Money's package coming up.

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[Jim Cramer]

We're going over Knowing Thyself tonight how to not just buy the right stocks, but the stocks that are right for you. We discussed the importance of suitability and the essence of what's suitable for the newborns. But what's suitable for the kids? What do you do for them? I think you should do everything in your power to get your kids involved in investing in stocks. Teach them that stocks represent pieces of companies that they might like. Now, let's be honest. These days most parents probably think they couldn't explain what a stock is to a kid, especially a young kid. That's not how I grew up in my house, though, as much as I love sports, and we even had tickets for the 64 World Series. We didn't make it, but. But we had them. Well, to me, stocks were supreme. My father had gotten a tip from his brother, who knew a stockbroker he played tennis with. Guy told him to go buy a company shares in National Video, which for all I know would have made it started right now as a Facebook Live show, But in the 60s it was a total bust that cost our family a fortune. Pop would always bring home the Philadelphia Bulletin. They went out of business the afternoon edition, and he wouldn't give me the sports section. He gave me the business section. He wanted me to learn about stocks. I look up closing prices. The market closed early back then. I try to anticipate where stocks were headed based on moving averages of how they were doing, straight line, this kind of thing. It was a game of momentum game. Most of the time I only knew the stocks by their abbreviations in what we call small agate type open a sponge. I kept the ledger to see how I would have done on tax, which was Texas Instruments, or maybe it was tgs, which was Texas Gulf, Sulfur or LTV or Rockwell. Oh, some companies that have disappeared, gotten acquired or just still hang out and trade. I also bet on a lot of airline stocks because suckers are always buying those and most kids are suckers. Eastern and national mostly, but brand of two, they were household names because of advertising. Of course, Most people under 50 have never heard of any of these. I like the stock picking process so much, I got my whole fifth grade class at Penn Manor involved. We'd all pick stocks and keep track of the closing prices for a week to see who could make the most money. The problem, of course, is that I was doing the exact opposite of what I should have been doing. Although metaphorically, what I was doing then is still being done now. Just picking stocks by how fast they were climbing and backing away from them if their climb seemed overextended or just slowed in velocity. Instead, I should have been picking the stocks of companies I knew and asking my dad for permission to buy actually one or two shares along with the money to pay for them, which probably would have been a deal breaker. So let's go over what would have been right and what was wrong in the picture I just painted. Think of this as Goofus and Gallant from the highlights magazines that you always used to find the dentist's office. Gallant, first of all, would never have taken a tip about National Video from his brother, who taken a tip from his tennis partner who worked, by the way, for the aforementioned bash. I learned later my dad had no idea what national Video even did he imagine that he bought. He didn't even know what they did. Now, you can find out more about it via Google right now than you could learn from Jack the Broker. Back then. National Video, you see, made vacuum tubes for TV sets. In the old days, when you had a problem with your television, it was usually because a tube inside had blown. Of course, the technology left National Video behind, so it went bankrupt, closed its doors about five years after Pop bought the stock, but had been going straight down since about five, five days after he bought it. He averaged down too many times to tell, but I know we had many a silent meal thanks to that day's decline in that godforsaken stock of National Video. I think we lost most of what we had as a family. There were a host of better stocks you could have picked back in the 60s. Most weren't that good, according to the moving averages, but they paid generous dividends. In retrospect, what we needed more than anything else was income. Me, the idea of picking stocks simply because they were going up was antithetical to the idea of buying stocks in companies and was more suited to dark throwing. At least I picked the hot ones, many of which were defense contractors that were getting rich as LBJ escalated the Vietnam War. Well, for me, the game was a lot of fun. But in retrospect, I learned the most about stocks from 2.3M board games. Yes, they used to have board board games. Those board games are called Acquire and Stocks and Bonds. My father sold games back then. His job, Acquire, was all about mergers and acquisitions. Stocks and Bonds was a fantastic game about accumulating wealth. Risky or conservative stocks, by the way. You can get those. They're on ebay. You can see what I mean. These days we have whole fantasy leagues of stocks, but few of them can teach you more than that one board game. Stocks and Bonds. It holds up. Now let's go back in time and think about what I could have done differently. First, when you're a little kid, you play with toys. It would have been natural to buy shares in Mattel or Hasbro. Now I'm not asking the kids to know what it means to own shares in a company in terms of price, earnings, multiple or even earnings. I'm simply saying it's a way to teach kids that a company can be owned by the public and you can own a share in that company, too. They know toys, of course. The irony should not be lost on my family. Imagine if my father had bought shares in a nice dividend stock for me. 3:00am rather than national Video. We had a box of Cheerios on our breakfast table every day of our lives. We could have bought General Mills. What a fantastic stock. And then there were the real easy one. What kid doesn't want to go to Disney World? It's that factor and not how many people sign up for the streaming service. That will always drive me back to the stock. The Disney library alone should be enough to make you want to own shares in the company. But the theme park? I mean, come on, let's not outthink this game. I don't know about Johnson Johnson's Band Aids and shampoo. They were staples and they've since been moved to Can View. I knew then as well as I know now that Kleenex is something you use to wipe your nose. There's a good company, Kimberly Clark, these are things we aren't even taught. They're imprinted. Finally, there's fast food. McDonald's is obvious. Or the incredibly well run Chipotle. If you want something a little more organic, bottom line, please buy your kids a few shares in a name brand that they know and you know. Something they can see and hear and touch. Then put it away. This stock won't always work out, but think of what you like when you were little or when your parents liked when they were little. See, if it trades, you more than likely have a long term winner. More importantly, you've got a great hook to get your children into a lifetime of investing. Let's go to Madison in Texas. Madison. Hi Jim.

[Caller]

If I can get a guaranteed interest rate of over 5% by purchasing a six month treasury bond, why should I invest in the equities market given market conditions?

[Jim Cramer]

Okay, because six months from now those rates may be lower. You can continue to reinvest, but the stock market is far exceeded longer term anything that you're going to get in the short term. Look, I'm not against 5%. I own 5% paper myself. But I will tell you this. You want to take the long term view and you can buy a dividend yielding stock that is very good. Like an Enbridge, like a one oak that'll have growth, not just a dividend. No growth. Owning Treasuries. Let's go to Annie in Rhode Island. Annie.

[Caller]

Hi Jim. Great to talk. Thanks for doing these teaching segments. I appreciate it.

[Jim Cramer]

Thank you. Thank you. That's what I got to do. I got to teach more and that's what I intend to do for the the rest of this, of the run. What's going on?

[Caller]

Well, I really enjoy the segments you do on technical analysis and I have two questions.

[Jim Cramer]

Sure.

[Caller]

One, what are the best resources if you want to study this? And how much should an amateur investor rely on Charts vs Fundamentals? Is it even appropriate question?

[Jim Cramer]

Look, I think charts are integral to your thinking. I think that I really trade Larry Williams. You just Google Larry Williams. His stuff is the best. That's where I learn all of the great people we have on have websites. But in the end technical analysis. I think I have a very good chapter. My last book and in get rich Carefully I spent a lot of time talking about technical analysis. It must be done. Okay, here it is. I happen to have it right with me. This is what my dad sold for a living. Can you imagine if he had bought this company 3M instead of national video? We might have been able to not have to lose the grape juice. Had to put the water in the grape juice. I didn't even know why. It's because we didn't have stops and bonds buy or tease a few shares in a name brand. Something they can see and hear and touch. Like I learned with this stocks and bond game that is available on ebay. And believe me, I wish I had the rights. I put it out again myself. Digitally. There's much more money ahead. I'm giving you my best investing habit for the rest of your life. Routines to retirement and everything in between. And then I'm answering all your burning questions with my colleague Jeff Mars. So stay with Kramer. Teenagers are incorrigible. The last thing they want to hear about is stocks. They have bigger fish to fry. To which I say, so what? I'm not going to tell them what to buy. I'm going to let them tell me. People watch this show have been huge beneficiaries of the innate consumer wisdom of my two daughters. We're always searching for ideas, both on air and especially for the CNBC investment club. Many of those ideas have come from young people, children, stepchildren. Their likes and dislikes can tell you a great deal. That's why I got behind Domino's so passionately for over a decade as the stock roared higher before peaking at the end of the pandemic. Like most of the other delivery players, sure, I met with Patrick Doyle the day he became CEO. Stock was at 10 bucks. Yes, the stuff did taste like cardboard before you reformulated the pizza in 2010. I loved that whole line of advertising and told you I thought it was a good spec. So sure, I recommended it. But that's not what made this stock a mad money crown. True. Nah, it was the technology. See, my kids, like your kids, hate talking on the phone. They think it's for losers. But apps, they love them. And when my kid discovered the Domino's app, well, they were sold. No talking to people who might get their order wrong. No nervousness. No worries about where their pizza was in the process. That's two things that the great local joints couldn't do. And a no cheese option for the vegans. The the ones that asked twice about the cheese. As in, are you sure you want no cheese? I think that's because of my kids. Finally, there was the joy of being able to pay online before the delivery person got there. Kids don't want to fuss with money. Of course, Domino's was just the tip of the iceberg. The delivery apps went on to Take over the world. All this technology was totally lost to me, though I never minded the phone. Was always patient about when the pizza would arrive, never cared about the interchange with every person. In short, I. I was not like the target audience. That's why I started calling Domino's, a tech company that sells pizza. Although now competitors can just outsource the darn stuff to doordash. Many of you know the story of how I got religion on app. Roughly 20 years ago, my youngest daughter asked for a second ipod. Not because she lost it, as I immediately accused her of doing, but because she wanted one in another color. For her, see, they were fashion accessories. She didn't want it to clash with her outfits. Personal computers. I mean, come on. My various employers have never embraced Apple. But my kids, for a long time, they'd rather be caught dead than use a Windows machine. They only wanted Macs. The iPhone was more controversial. They don't like change. They didn't like the plug change. They didn't want the earbuds. But what they really don't want is the Samsung. See, they're part of the Apple ecosystem, the much derided, much ignored Apple ecosystem with its service chargers that make it so they have to pay to store all their millions of pictures. What else? Fabulous. Google it, dad. Yeah, that's how I found out about Google now. Alphabet. And when I got the word from the kids, they weren't allowed to Google something that they were involved in in school. Well, just count me in. When I was doing my senior thesis at Harvard to do some mindless name dropping, we had access to the fabulous librarians and Houghton. Their job to look up anything you wanted. They had to go to the stacks for you, as they were called, and find out things that you would know where to look for. Well, that's all digital now. My kids get their news from their iPhones and they get their entertainment from Netflix. No, faang wasn't purely their creation. I figured out Amazon. But Facebook, Like I said, I went to Harvard. When you were a freshman, you got a book. It was called Facebook, and it had everybody's picture in it. Facebook is a derivation of that. Facebook. My kids were on Facebook earlier. My youngest got sick of Facebook early on, probably because I got on it. But then she went on to Instagram, which Facebook cleverly acquired and then kept as something separate. So you really didn't know it was part of something that older people had discovered. I didn't think the ads worked until we were inundated with Red Hot Chili Pepper merchandise bought on A clip for something that, as my daughter said, wasn't an ad, just a link. Oh lordy, does everyone else free that their ad is just a link. But it seems that only Mark Zuckerberg has the forethought to care about the user experience to such extent that it works. Because the ads actually make sense, you do want to click on them. How about Chipotle? The kids love the fresh and organic Chipotle salad. Still do. They're vegetarians. My youngest returned pretty early after the food sickening incidents. The only difference being that she didn't take out because she didn't want to be seen inside. All right, she went to Nothing's perfect about their picks, but I recommended this stock from the low hundreds all the way to 2000, largely because they liked it so much. Eventually, your kids will age out of the key demographic. However, if you pay attention to their likes and dislikes, you could net yourself decades worth of good stock picks. But once they reach a certain age, you need to pray for grandchildren if you want the freshest ideas. What if the picks themselves aren't any good? What if there aren't? That your kid likes a device that pictures on your head and takes pictures? Or it fits on a wrist and measures steps? I don't know. Hey, that's the cost of learning. Remember, they have their whole lives ahead of them to make that money back if it's a screw up. You see, that's the beauty of teen investing. You can lose it and no one will notice. You pull the same kind of thing later in life and its real consequences. Like here for me. So the bottom line is that for now, you can learn from your teenage children. Trust me. Me invest with them and you will not regret it. Mad money is back after the break.

[Mad Money Announcer]

Coming up, are you trying to figure out which kinds of investments are right for your age? Well, look no further. Professor Kramer is taking up the assignment next.

[Jim Cramer]

All night I've been talking to you about suitability. What's a suitable investment, given your tolerance for risk and especially your age? Or when you're picking stocks for your kids to get them interested in the market. So how about the rest of our lives? Sadly, as you get older, you have less flexibility. Fewer investments are indeed suitable. Not initially, though. When you're in college, I don't expect you to put any money away at all. College costs too much. When I used to be doing my college tours, trying to get back in that game, I tried to get people to buy a share or two of stock. But college saps the Living daylights out of you in so many financial ways I now regard as a total hardship to even contemplate savings. But once you're out the real world, it's imperative that you save. Preferably through a 401k plan at work or even better, a self directed IRA. Now see, I always prefer the latter because you can pick stocks, not just pick from options chosen by your employer. The typical have high fees that really knock your return down. That's for another show. This is where you have to begin the mix of index funds and individual stocks. Remember, I prefer both. There's too much risk in individual stocks to just put together a portfolio of names of your own choosing. So at a minimum I am demanding that you put your first 10 grand of savings from your first job into an index fund. The S&P 500 being my favorite as I mentioned before. Now I know that some will argue with this this I see them arguing on social media. I don't care. I know that the possibility of one really bad stock hurting your nest egg even as early as in your 20s is simply too risky. With a nice thug of cash and index fund, no single stock or even sector can do that. But with the rest of your money behind your first that after that first 10,000 bucks. I do like stocks and I do want you to be diversified. And that's why we play a my diversity around here when we can where I try to explain what you diversification is in a breezy way. It's why we created the CBC Investing Club to show you how to invest using my Chapel Trust as an example. Although the trust has a lot of restrictions to prevent me from using the show to juke the stats as they say in one of my favorites the Wire. But I can tell you that if you want in depth work on stocks, I frequently mention on this show the investing club is the way to go. See, I set it up because I always talk about buy and homework. I tell you that you need to buy a stock but you but then you have to keep up with it. Buy and hold doesn't work. Remember back to earlier the show when I discussed how hard it was to do the homework. Those trips to the Harvard Business School library to study months old research in microfiche. Now it's so easy that I've had to scrap one of my earlier road rules. You no longer need to spend an hour a week studying each of your stocks. Sure you need to read the conference calls. You can google articles galore so many that you'll get sick of the process very quickly. You can have articles and research pushed to you, along with charts that I only could have dreamed of having 30 years ago. Or you can read what we write at the Investing Club. Let us help you do the homework. Whatever makes you the most comfortable in your efforts to take charge of your money is what I favor. Remember, I want you to be either a good manager of your money or a good client. I do not have a preference. So let's talk about picking stocks as you get older. It's at this stage when you need to know thyself in terms of risk. Until you get to the late 20s at the earliest, I want you to take tons of risk, maybe more than you think you can handle, whether you like it or not, because you've got your whole life to make that money back if something goes wrong. But when you get to your late twenties, all I can do is ask you to think about what you'll do in a sell off. Do you have the wherewithal to take a decline and buy more? Or does the sell off sicken you and make you wish you had no expense exposure? Can you accept that stocks go down? Not a silly question given how they typically do go up over a period. I'll be with periodic swoons down that are painful. These are crucial questions that only you can answer about yourself. I would like you to take more risk and own more individual stocks that have growth characteristics once you put away that first 10,000 index fund. But once you're in your late 20s, I would hate to see you commit more than 20% of your money, your mad money, to speculative growth stocks. And as you get older, I want you to capture more income by owning stocks that pay dividends. Perhaps add a fund that boasts high dividends than the S&P 500 offers. But don't be too quick to do so. In fact, I wouldn't advise you to start investing for income until your 30s. And even then you should do it gradually and small. Only in your 40s do I want to introduce bonds to your portfolio. Now, in the old days it would have been hard to suggest you don't start investing in fixed income by your 30s, let alone your 40s. But the problem with that is twofold. For life expectancy, many people are outrunning their fortunes and the bond market itself. There aren't always a lot of risk free fixed income alternatives that don't entail a lot of risk. Generally, I'd rather own a high yielding dividend stock that can raise its payout rather than a 30 year treasury bond that yields, say, 4%. Of course, as you get older, I recognize that most bonds do have that non caveat empty provision. You can and do get your money back. Can't say that with stocks. As you enter your 60s, it's easy to see how you can put up to 50% of your money into bonds and take bonds up to 10% more each decade. That brings us back to the notion of suitability if you can't handle the risk, if you think the stock market is simply not as legitimate asset class as it once was, good is prone to such deep values and what in retrospect look like overblown threats, then I think you have to decide yourself if cashing out or taking stocks to minimum levels is right for you. And I can't blame you if that's the case because it has been an uncertain asset. The bottom line, it's your life, not mine. So get comfortable with what you can live with. But risk, at least until your middle years, should remain your best friend. Stick with Craig. I always say my favorite part of the show's answering questions directly from you. I'm bringing in Jeff Marks, my portfolio analyst partner in crime. Help me answer some of your most burning questions. Now look for those of you who are part of the investing club, Jeff Lean, no introduction. For those of you aren't members, I hope you will, of course, I want you to join. I would say that Jeff's insights and our back and forth helped me do a great job and him do a great job for all mayor money viewers, but more importantly for members of the club because this is what we really do. Now, if you like this, be sure to this thing, you know, I mean, like, I like when you go to, like I went to a restaurant, you got to do it. My kids show me how to do it. All right, so first up, I'm older. First up, we have Tony in North Carolina who asks, in a losing position, what is the difference between being stubborn or taking the loss and then revisiting? Okay, well, this is a fundamental question. See, in the end, what a lot of people confuse is taking a loss. You take a loss. If you find that the fundamentals are deteriorating. You don't take a loss because it's like you can't take it anymore. So I think that this notion of a losing position, if it's a position where things have changed, you should have taken it. We have made the mistake at times of not identifying that there are changes at a company, but we don't like to view a company As a loser or a winner and a stock loser winner. Because some of our greatest picks have been losers. Sure.

[Jeff Marks]

There's broken stocks, there's broken companies. What you have to identify is that if the issue at hand is a structural issue at the company, structural issue at the industry level, then that you're being stubborn if you hold on for too long. But it could present itself to be a great buying opportunity if you stick with it and the company is able to fix itself up.

[Jim Cramer]

And we've had this many of us over time. All right, now we're taking a look at some of our of your mad mentions. So let's go to Isaac who says Jimbo, which is what everybody calls me at home by the way. Jimbo, my whole family loves your show. Thank you. I don't think I bought or sold anything in the past 30 years without checking to see if you said anything about the stock. Now this is what I love. See, Isaac uses us as a resource, one of many resources. I have never claimed to be the seer. I have claimed. And by the way, someone, someone stop this point, says, you know you're a great entertainer. Well, I like to entertain, to bring people in. I'd like to think that I'm not just a great entertainer. But what I would point out is that I want you to check. You should check. Maybe we've said something. We're input. That's what we are. We are an input. Are we the input? No, but we are an important, important input. I believe in making stock decisions.

[Jeff Marks]

Yeah, absolutely. It's doing the homework, showing you how to do the homework so you at home don't have to, have to, but it's a guiding hand.

[Jim Cramer]

Look, I always, I always say that if you want that there are people, a lot of people say just on index funds. I disagree that there are always people going to want to own stocks. You want to own stocks. Watch the show, be a member of the club. You'll be much better at it. All right, next up we're taking a question from Rachel in Florida who says, hi Jim, we have a 30 year plus time horizon. We inherited some money we don't need to live on. Does Jim advice against investing 20, 25% money into S and P and the rest in stocks and bonds? Okay, this is really important right now. 30 year plus time rise. Stocks yes. Bonds no. You don't need bonds until you get very old. This is one of the points where I am definitely at odds with most of the so called Sears out there. I say that when you buy A lot of bonds you're betting against your life. If you think you're going to pass away when you're 72, then it's 65. Yes. By bonds I want people to think young. I know that sounds almost Pollyanna, but the reason why I say it is because if you have to go into a long term term care facility and you own bonds for the previous 20 years, you're not going to have enough money. Stocks historically have outperformed. Yes, 30 years.

[Jeff Marks]

Long term time horizon, the key line too. You're fortunate enough where you don't need to live off that money. That means you don't have the risk of selling it in a potential market downturn. You can stay invested market and over time you should do quite well.

[Jim Cramer]

Yeah, I know. Look, I think that when you. It's really a tricky question because people don't really like to talk about mortality. But what really does matter is, is that if you have a long life and you've cashed in on bonds in your 50s and 60s, you're going to be broke. You'll be broke. As long as you take that horizon. You can ride things out with stocks and I think you outperform bonds anyway. Thank you, Jeff. I'd like to say there's always a bull market summer and I promise try to find it just for you right here on my Monday. I'm Jim Cramer and we'll see you next time.

[Podcast Disclaimer Narrator]

All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by Kramer on television, radio, Internet or another medium. You should not treat any opinion expressed by Kramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Cramer's opinions are based upon information he considers reliable. But neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Mad Money disclaimer, please visit cnbc.com madmoneydisclaimer Are you looking.

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