Jim Cramer Warns Investors Against Buying Stocks In One Go: 'Nobody Has That Kind Of Insight'

Prominent market commentator Jim Cramer reportedly said buying stocks in incremental quantities is a better strategy versus purchasing all at once.

"When you buy all at once, you're basically declaring that the stock absolutely won't go any lower," Cramer said, according to a CNBC report. "I mean, come on, that's crazy. Nobody has that kind of insight all the time. Buying gradually, in stages, is all about recognizing that our judgment is fallible."

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The market expert believes it's "plain hubris" to infuse a large chunk of one's net worth into any stock all at once, especially given that Wall Street, unlike regular merchants, does not have a return policy. Instead of loading up on 50,000 shares of a good company at once, Cramer recommended buying in smaller increments, for instance, 5,000 or even 500, over time.

Cramer also spoke about the difference between "damaged stocks" and "damaged companies" saying the former may be down for no good reason, or a reason that has nothing to do with the underlying company while the latter likely has to do with the fundamentals of the firm.

However, he did acknowledge that the distinction between a damaged stock and a damaged company can be difficult to discern. "Never buy a position all at once because what you think is merely a damaged stock might turn out to be a damaged company. If you take your time, you're much less likely to end up with a large quantity of broken merchandise," he said.

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