I agree, what I heard Cramer say was that if you need cash in the next 5 years, you are better to take it out now than to leave it sit. Sounds identical to the recommendation at the top of the quote to me.

I just looked at my 401k and my IRAs. All are invested the same, 65% into moderate risk stock funds, 35% invested into bond funds. Overall I have made money in the past quarter, and expect to continue in the 4th quarter, though not as much. Overall my stocks lost, but the bonds have done so well they offset the stocks and then some, yielding a net gain! I thought about re-proportioning my investment profile to increase my bonds and decrease my stocks, but I think it would be better just to leave it. As was stated previously, with the stock values dropping and my horizon at or near 20 years, I will be able to buy more stock shares now at a reduced price and watch them grow later when this mess is over with. If I shifted my investment and bought fewer stock shares now, my long term returns will be reduced. One thing we know from the past; no matter how big it falls, it always rebounds to a higher level later on.

I never liked hedge funds, and index funds have always made the most sense. Hedge funds are for professionals, and can get away from you fast if you aren't paying attention and don't have the ability to respond quickly, which is exactly what's been happening lately. Index funds don't react like that. For index funds to move that much in such a short time, the world market would really be on the verge of collapse; the sort of thing where you see big investors getting into rocket ships to find another planet to live on.