Why it can be hard to sit on good stocks

CNBC’s Jim Cramer described Tuesday why it can be difficult for investors to rely on solid stocks. Some may get spooked by analyst downgrades, for example, and sell their position in a great company that will be hard to buy later.

“Over the last decade, the hardest thing to do is hold onto good stocks,” he said. “But analysts and commentators like to target the big long-term winners. Their jeremiads have scared so many people away from amazing earnings.”

According to Cramer, many on Wall Street can be “complacent,” with bulls ignoring downside risks and bears ignoring opportunities. If investors want to take action on a downgrade, it is wise to wait to sell. You then buy back at a lower price, but this is “incredibly difficult” to achieve, even for skilled traders, he said.

Cramer recapped the action in the actions of Apple and Amazonwhich received downgrades on Monday — ratings Cramer disagreed with. Analysts have been leaning toward Apple in part because of perceived hardware problems with the latest iPhone model, but Cramer countered that the company’s products have been consistently popular. He also acknowledged that Amazon may face some headwinds, but the megacap has a consistent track record of comebacks.

Both stocks sold off sharply on Monday, he pointed out, but recovered by Tuesday — preventing investors from buying back shares if they sold off during the previous session.

“You have to understand that when analysts downgrade after stocks have already been hammered, when really good investors ignore the positives, then it can be a bleak time,” Cramer said. “But not so bleak that we can’t make money focusing on the fundamentals of companies.”

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Disclaimer CNBC Investing Club Charitable Trust owns shares of Apple and Amazon.