Jim Cramer on CNBC's Mad Money advised young investors rebuilding savings after buying a home to focus on long-term investing through a mix of index funds and individual stocks while preparing for inevitable market volatility.
Responding to a caller who said he had recently drained much of his savings for a home down payment, Cramer recommended a "50/50" investing strategy split between broad index funds and a smaller basket of carefully selected individual companies.
"Five stocks that you like and then index funds.
So index for 50%, stocks for 50%," Cramer said.
Read Also: Millions Of Americans Are Tapping Their 401(k)s For Emergency Cash—But Experts Warn The Long-Term Damage Could Be Far Worse Than People Realize Long-Term Focus Cramer argued younger investors should lean toward growth-focused indexes like the Nasdaq rather than the S&P 500 because they have more time to recover from downturns and benefit from long-term technology trends.
