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CNBC’s Jim Cramer began his career as a professional investor at Goldman Sachs. While there, he began learning the basics of how to make money in the market: the importance of knowing your personal investment goals and maintaining a diversified portfolio.
“From my early days at Goldman Sachs, I learned the core principles of investing and found solid ideas for building diversified portfolios to create long-term wealth in a way that suits my clients. ” he said. “Think of yourself as a customer of this program.”
At Goldman, Mr. Kramer handled non-discretionary accounts. That meant he worked on commission and needed customer approval to invest money in stocks he deemed valuable. In this role, he discovered the importance of being able to clearly express investment ideas before taking action. He also learned that it’s important to understand an investor’s goals when building a portfolio, such as whether they can afford to take risks or whether they want safer investments.
It’s also important not to turn a trade into an investment or vice versa, Kramer said. Investors shouldn’t fixate on or try to justify falling stocks, but if they pick a good one, they should leave it alone. He also came to understand the value of diversification. When he first joined Goldman, he and his clients were keen to invest in oil. However, when commodity prices eventually plummeted, companies with oil-based portfolios were wiped out.
“But do you know who I really learned from? My customers, primarily wealthy people from all walks of life,” he said. “At Goldman, I learned something that to this day many professionals in this industry cannot understand: individuals can and do beat the market on a regular basis. ”
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