CNBC's Jim Cramer said investors always need to be prepared for corrections, because like they rain, they are unavoidable.
"I expect it to rain, I prepare for it. When the rain comes, I'm ready. I have an umbrella or a coat, or I stay indoors," he said. "That's how you need to approach the possibility of a pullback in the market. Sooner or later, we're going to get one, so best have some cash ready on the sidelines — just in case that time turns out to be now."
At his former hedge fund, Cramer would always pull back if he felt his performance was "swinging too much to the upside," he said. Sometimes, he'd quickly sell stocks to prepare for a decline. Cramer admitted he may have bought everything back days later if the downturn didn't come, and he may have felt a little foolish. His clients, however, thought he was "a genius" when things did turn sour, and his portfolio continued to perform well, he said.
"Don't hope for anything. Hope is emotion, pure and simple," he said. "And this is not a game of emotion, or at least, not your emotions. Every stock you own because you hope it goes higher is another position in your portfolio that's not being filled by a stock that you believe will go higher."
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