Investing in stocks can get you on the road to financial freedom. Many people also invest in stocks to save for a college fund or a retirement plan. To see good results, it’s best to choose certain stocks and invest wisely. Jim Cramer, a former hedge fund manager and the host of Mad Money on CNBC, created the Cramer COVID-19 stock index to help investors choose good stocks.
Cramer coined the FAANG stocks tag, which refers to a group of high-flying U.S. tech companies — Facebook, Apple, Amazon, Netflix, and Google parent Alphabet.
The Cramer COVID-19 index features 100 stocks representing diverse industries. From the Cramer COVID-19 pandemic stock list, investors can also gain clues on potentially bad investments that they should avoid. Cramer weighed in on many other stocks outside his COVID-19 index. What are Cramer’s best and worst COVID-19 pandemic stocks?
Jim Cramer's pandemic stocks to buy
The Cramer COVID-19 index features Apple, Amazon, Netflix, and Google parent Alphabet. Cramer thinks that investors should buy big tech stocks because they have a bright future despite the breakup threats over monopoly concerns. Billionaire investor Warren Buffett hasn’t been a big fan of tech stocks, but he owns Apple and Amazon stocks.
The other household tech names on Cramer’s list include PayPal, Microsoft, Shopify, Fastly, Chewy, Etsy, eBay, and Square. Cramer’s other tech favorites are Zoom Video, Wix.com, VMware, and Nvidia, which is buying SoftBank’s ARM business for $40 billion.
In the retail space, Cramer thinks that Walmart, Home Depot, Target, Kroger, and Costco can add value to your portfolio during and beyond the COVID-19 pandemic. Also, Cramer favors American Airlines and Boeing.
Jim Cramer's pandemic stocks to sell
There are some stocks that Cramer thinks investors should avoid. He cautions investors against putting their money in oil stocks. He singled out BP and Occidental Petroleum as oil stocks that wouldn't help an investing portfolio.
According to Cramer, the future doesn’t belong to fossil fuels. Many young portfolio managers don’t want to be associated with oil stocks, which makes Cramer think that oil is the new tobacco. When the COVID-19 pandemic struck, BP, Shell, and other big oil companies moved to cut their dividends.
The Trump administration has helped the oil industry in terms of regulations. Cramer thinks that a Joe Biden presidency would mean tighter regulations for the industry, which would increase costs for oil companies and potentially put dividends at risk. Weak oil prices are also compounding the oil industry's woes.
Still, Cramer thinks there are some great oil stocks. For example, Cramer thinks that Pioneer Natural Resources and Chevron are exceptions in the oil industry. Cramer said that Pioneer Natural Resources has excellent assets.
Away from oil, Cramer thinks there are better stocks to buy than Walgreens and General Electric. He's wary about bank stocks. Cramer singled out Well Fargo, Morgan Stanley, and First Horizon as bank stocks that investors should avoid. Also, Cramer doesn't recommend buying Chinese stocks due to geopolitical tensions and dubious accounting practices.
Finally, when considering the best stocks to invest in, it’s wise to identify your investing goal and know your risk profile. You should evaluate the investment and focus on companies with businesses that you understand.