Cramer’s investment dos and don’ts for this tricky market environment

CNBC’s Jim Cramer on Thursday laid out his dos and don’ts for investing in the current market environment.

“If you accept your predicament and you follow these rules, you’ll have a chance to prosper in this brand new market. But if you try to cling to what worked last year,” the “Mad Money” host said, “I think you’ll get blown out just like the people who tried to stick with dreamer internet stocks during the dotcom collapse.”

The Dow Jones Industrial Average climbed almost 200 points higher on Thursday to 32,619.48. The S&P 500 moved up 0.52% to 3,909.52, and the Nasdaq Composite gained 0.12% to close at 12,977.68.

This is a tricky situation, despite the positive day for stocks, Cramer said, with the market on a weekslong downtrend. Whenever the market rolls over, he said, investors go through the five stages of grief: denial, anger, bargaining, depression and finally acceptance.

“We’ve now made it … to depression, even as the averages rebounded nicely this afternoon,” he said. “This is when lots of investors typically tend to throw up their hands and give up on the entire asset class.”

Below are his tips to help retail investors weather the current situation: