Cramer Beat the S&P At His Hedge Fund But Advises Retail to Join The Index

Jim Cramer says his old hedge fund returned 24% a year over 14 years, triple the S&P 500’s 8%. Yet he told a caller to put two-thirds of a retiree’s $600,000 into an S&P 500 index fund. Cramer, host of CNBC’s Mad Money, still insisted that homework-driven stock picking can beat the market. Why Back the S&P 500 After Beating It? Citing that after-fee record, he rejected the strict efficient markets hypothesis, under which prices already reflect all information. Markets often act irrationally, he said, which gives stock pickers an opening. However, he called index funds best for most people, a view he says dates to 2000. Cramer called the deciding factor suitability, meaning an investor’s available time and temperament.

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