Training Ride (Education) - Jim Cramer Outline for Active Stock Portfolio

Jim Cramer outlined his game plan for building an active stock portfolio.

Before Jim Cramer got started, he made this point: Use discretionary funds for an active stock portfolio. Do not play with money that you need. And do not play with retirement money.

Here are Jim Cramer's 10 rules for building an active stock portfolio, as he delivered them...

No. 10: Buy a stock that is a stock for the future. Call it your non-tech hope stock, Jim Cramer said.

No. 9: Pick a retailer, preferably a regional retailer that still has plenty of growth ahead.

No. 8: You need some technology to have a diversified portfolio. Intel (INTC) would be a good start.

No. 7: You need a cyclical name. Dow Chemical (DOW), Deere (DE), Caterpillar (CAT), and Boeing (BA) are examples.

No. 6: Own a secular stock -- a soft-goods stock such as Procter & Gamble (PG), a Kellogg (K) or a Johnson & Johnson (JNJ).

No. 5: Own one speculative stock. Something you think is a winner, though. You have to do your homework on this one.

No. 4: Hold one financial. Own your local bank. Jim Cramer owns Commerce Bancorp (CBH), a regional bank near Jim Cramer's home.

No. 3: Own a brand-name blue chip.

No. 2: Oils. A must-have. They're consistent performers. And they have high yields.

And the No. 1 tenet in Jim Cramer's tool kit: Pick a company that you know. You want to have an edge. Perhaps one of your pals works there.

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