Invest in companies that are ‘thinking twice’ before hiring during a Fed-mandated downturn, says Jim Cramer

On Wednesday, CNBC’s Jim Cramer advised investors to buy stocks of companies that are adjusting their hiring efforts to adjust to the economic environment.

“If you want to invest in prodigal companies, be my guest. I want to invest in well-run companies…with very smart CEOs. That means buying the shares of those companies that think twice about continuing to hire in this environment,” he added. said.

The ‘Mad Money’ host’s comments come after Google said in an email to employees that it would suspend hiring for two weeks, according to The Information. Parent company Alphabet said in a memo to employees last week that it plans to slow the pace of hiring over the next year, citing economic headwinds.

Alphabet shares closed slightly higher on Wednesday.

“It’s still ridiculous for anyone to freak out about these stories, again. These stories of slowing hiring, as unfortunate as they are. … When you hear ‘Fed-mandated slowdown,’ that means less hiring and no more layoffs,” he said. said.

The Federal Reserve has raised interest rates this year to curb soaring inflation, raising fears of an impending recession. The next Fed meeting is later this month, and investors expect a rate hike of 75 or 100 basis points after June’s searing inflation numbers.

Cramer told investors that instead of nervously watching big companies and their hiring moves, they should focus on adopting a long-term strategy for their portfolios.

“Take long-term positions in what you like or just buy a very good index fund in terms of low cost, and hold it. It’s the best form of investment and it’s the one that historically beats inflation easily,” he said.

Disclosure: Cramer’s Charitable Trust owns shares of Alphabet.

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