Cramer Sticks With Monthly S&P 500 Investing Despite Market Risks

Cramer writes that he is not allowed to own individual stocks but can own index funds, and has methodically put a decent chunk of his earnings each month into an S&P 500 index fund. He says he sometimes wants to stop, skip a month and keep cash, mirroring the heavy cash position in the Investing Club, but concludes he does not have a strong case for owning individual stocks now.

He points to an approaching earnings season where expectations finally seem too high, after recent off-cycle reports were not dazzling. He also lists international worries: why the Saudis are not fighting back after attacks by Iran-backed Houthi rebels in Yemen; why the United States is siding with the Russians just to get some diesel fuel; no end in sight to the war in Iran; and the view that Iran will collapse because no new oil money is coming in, which he says is antithetical to a regime that prides itself on a spartan life. He says the possibility that faceless leaders might make a deal to prevent being overthrown died when the country murdered its dissenters before the war began.

Europe has returned negatively, with France on the hot seat over a growing debt crisis, budget deadlock and widespread protests. Cramer does not think France will precipitate a crisis because the EU has methods to deal with the wayward after the 2011 European sovereign debt crisis, but says many people may be betting wrong on France, and maybe Japan. Negative international headlines will not end, he writes.

The worst factor, he writes, is the increasingly hostile attitude toward data centers and the companies spending on them. He calls Nvidia the bellwether and says its stock is stuck: the AI chipmaker cannot shake the circular-financing view and concerns that there will be fewer clients because of data center bans. Midterm elections may bring affirmation of a rolling building ban rather than cloture. Since the only real oomph in the economy comes from the data center buildout, he finds it difficult to see where market energy will come from.

The Federal Reserve is hellbent on getting inflation to 2%, and its moves are raising the long end of the yield curve, though most just say that is caused by inflation or supply. He sees the 30-year Treasury yield heading inexorably to 6% and change, at which point the remaining housing market will be lost.

For someone investing for the next month or two, Cramer says he can see wanting to skip October. September is historically the worst month, though he says it is only anecdotally terrible, with 1929 and 1987 crashes to thank for its reputation. It only feels like a crash because it always feels like a crash now for one reason or another.

He keeps investing because the money is meant for the long term and he cannot and does not trade it. He hopes Fed Chief Kevin Warsh actually takes inflation to 2% and that high interest rates pressure Washington lawmakers to rein in the federal deficit by cutting spending here and there and increasing taxes to stop what he calls the lunacy of the deficit. That has not happened yet and will not happen in October if he skips his contribution. But if he truly believes Warsh is a man of his word and will not fold under a president who wants rates cut, he has to keep putting money to work.

He compares investing to staying in shape: it has to be done regularly or else. After years of automatic contributions, he thinks skipping one would lead to many more being skipped. Looking back, he wonders what would have happened to his savings if he had read that day's headlines and decided he was crazy to put money into the market. The answer, he writes, is that he probably would not have as much saved for retirement.

So he closes his eyes to the short term. He accepts that he has to buy a lot of S&P 500 stocks he hates, unlike Club members who can also own individual stocks. He invests knowing that, as crazy as it has been, he has made a lot of money with stocks, and as crazy as it might be, he believes he can do so again.