I was wondering whether Jim Cramer’s CNBC Investing Club has been beating the S&P 500 Total Return Index (it includes dividend reinvestment) since 2019 or not and how the risk of his portfolio compared.

It turns out that over the 2019-2025 period he did fairly well vs. the S&P 500 Index (16.90% vs. 18.53% for the S&P 500 w/ dividends included as it should), but fell a bit short with a lot more effort and higher risk.

His risk level was greater, as shown by the lower Sharpe Ratio vs. the S&P 500 (the higher the better). In other words, the SP500 did a bit better with less risk (risk estimate is below) and less effort.

This means you may do better by investing in a subset of his stocks vs. his entire portfolio, but the risk would then go up further as diversification would be lower. Adding market timing might improve the results, but would add risk to the stated return levels.

The Sharpe Ratios tell you that the S&P 500 generated $0.935 units of excess return over 1 Year US Treasuries for every unit of volatility, making it 20.96% more risk-efficient than Jim Cramer’s portfolio, which generated 0.773 units of excess return per unit of volatility.

The Conclusion?  You could get some good stock ideas from Jim, but don’t expect to beat the S&P 500 Index (SPX, SPY) or lower your risk vs. investing in the S&P 500 Index.  If you are a good trader, you may be able to improve on his results and decrease risk, but that could actually increase level of risk through timing mistakes and less diversification!

NOTE: Analysis of the numbers was done via Google Gemini and as they say is subject to error.