As the market pulls back, Jim Cramer explains how to handle sell-offs

CNBC’s Jim Cramer unpacked Tuesday’s market action and suggested that it can be worthwhile to stick with good stocks as they weather losses, telling investors to buy, not sell, into weakness.

“When you get hit with a sell-off…that’s when you should buy more of your favorite growth stocks…the ones you’ve done the homework on and believe in,” he said. “I think it’s too soon to buy here, this is day one. You have to wait for your stocks to go down a bit more before you can pull the trigger, as many stocks are still very close to their highs.”

The indexes fell during the day’s session as investors worried about the profitability of the artificial intelligence boom. The Dow Jones Industrial Average dipped 0.20%, while the S&P 500 lost 0.38% and the Nasdaq Composite slipped 0.67%. Software giant Oracle led a decline in the tech sector after a report that its cloud business is performing worse than estimates and it is losing money on some of its deals renting Nvidia chips. Shares closed down 2.52%.

Cramer suggested it’s wise to have faith in the market generally, saying it’s possible to make money in individual stocks even though there is always risk. He said investors can minimize risk by accumulating a stock gradually instead of all at once. That way, he said, down days like Tuesday create a better entry point for more buying.

Cramer referenced his Tuesday afternoon interview with Nvidia CEO Jensen Huang, saying he heard positives about the company and the future of AI that run contrary to the day’s tech decline. He added that the he feels confident about buying more Nvidia if the stock goes lower, suggesting he accepts and expects that many of his favorite stocks will eventually see declines.

He also said Tuesday’s declines make sense given how much stocks have run, including a number “parabolic moves” that can precede big losses.

“We had a legit tech pullback today,” Cramer said. “Yet, when I survey the stock market battlefield, I don’t sense the kind of violent selloff that makes me think that we’re going to have a series of vicious down days ahead.”

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Disclaimer The CNBC Investing Club owns shares of Nvidia.