CNBC's 'Mad Money' host and veteran market commentator Jim Cramer has urged investors not to get nervous in the face of concerns like the Moody’s downgrade of U.S. debt. The U.S.'s rising debt stands at $36 trillion as of now.
Investors should instead invest in gold or Bitcoin as hedges against excessive government borrowing, Cramer recommended. “Fear is what must be tamed if you want to be a good investor.”
Cramer recalled the S&P’s long-term credit downgrade in 2011 and Fitch’s long-term foreign currency issuer downgrade in 2023, which he claims led to short-term declines only to recover soon.
Those who recently sold stocks because of the national debt worries have been wrong, Cramer said.
A downgrade isn't a "get out now" sign, Cramer warned. Instead, it's "an early warning to invest more — not more aggressively — but more of what you can save." Investing, not selling, is the real hedge for those concerned about the government’s creditworthiness, he added.
The host slammed those warning of a severe market downturn, saying such people are "either fools who know nothing or incredibly shrewd short sellers who really need to spread fear because of their business model.”
Moody's weekend downgrade led to early losses on May 19, which were quickly recovered. The S&P 500 index closed at 5,963.60 points, the Dow Jones Industrial Average (DJIA) at 42,792.07 points, and Nasdaq at 19,215.46 points.
The assets Cramer recommended are also lying in the green zone.
As per Kraken, Bitcoin was trading at $105,245 at press time, up 2.2% a day. Gold, on the other hand, was trading at $3,240.44 per oz, up 0.34% a day.