Here’s how to navigate in these difficult times.
- Financial guru Suze Orman says today’s stock market is not normal and extremely frustrating for many people.
- It is important to manage your portfolio carefully in these difficult times.
“Nothing is normal.” That’s what Suze Orman recently admitted on her podcast when discussing the state of the US economy and stock market.
It is very easy to understand why she says that. Stocks have had a miserable year, and now many investors are seeing losses in their brokerage accounts compared to where their balances were at the start of 2022.
Meanwhile, wild levels of inflation are wreaking havoc on many people’s budgets. And the problem could get worse before it gets better.
Obviously, these are not easy economic times to navigate. But it’s important not to act irrationally at a time when nothing is normal. With that in mind, here are three tips for managing your investments right now.
1. Don’t panic sell losing stocks
If you log into your brokerage account and find that most of the stocks you own are down for the year, your first instinct may be to sell them – before things get worse and you risk losing. more money. Don’t.
Right now, the loss you see is just a loss on the screen. Or, to put it another way, it’s a hypothetical loss. But if you sell investments while they’re falling, you’ll turn a hypothetical loss into a real loss.
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Ideally, the money you have in stocks isn’t money you need right away (all the money in your emergency fund really should be safely stored in your savings account) . So the best thing to do right now is to sit back and leave your existing investments alone.
The stock market has a long history of recovering from declines, and there’s no reason to think investment values won’t recover from where they are today. It may take a little while to get there.
2. Consider buying I bonds
Although inflation can cause consumers a world of undue stress, there is an investment option that allows you to take advantage of high levels of inflation: I bonds. interest is linked to inflation. Since inflation is very high right now, I bonds pay a lot of interest.
Suze Orman actually says that right now, I bonds are the best investment you can make. And you can buy up to $10,000 per year. If you have money that is not tied up in other assets and that you don’t need in an emergency, it might be beneficial to invest in I bonds.
3. Take advantage of discounted actions
Since the stock market is down as a whole right now, you might have the option of buying stocks of companies you believe in at a discount. If you have extra cash on hand, this is an option worth considering.
Obviously, these are not normal economic times. But it’s important to try to keep your cool and not make rash decisions about your wallet. At the same time, you may want to take advantage of other investment opportunities that could make you rich in the future.