Suze Orman: Worst Thing You Can Do for Your Finances During an Uncertain Economy

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How do you feel about the economy right now? If you’re like most people, you have feelings like fear, worry and dread. These feelings are completely normal during economic swings. However, letting your feelings drive your decisions can have long-term consequences on your finances.

Below, we’ll cover why Suze Orman believes the worst thing you can do for your finances during an uncertain economy is to panic and how you can avoid panic decisions to safeguard your personal finances.

In contrast, this what what Orman said is the best thing you can do with your finances.

The Worst Financial Move: Panic

In one of her podcast episodes, Orman talks about the worst thing you can do for your finances: panic. Panic often leads to irrational and irresponsible financial decisions, such as selling your investments at a loss. Although this can seem like a rational decision at the time, you may lose out on future gains when the market rebounds. 

Let’s look at a real-world example. In 2022, the S&P 500 saw an 18.04% loss, according to data by Stern NYU. To avoid losing more money, you sold your stocks at the end of 2022. However, in 2023, the S&P 500 solidified a 26.06% gain, recouping more market share than was lost in 2022. The same trend continued into 2024, with a 24.88% gain. By panic selling, you would have lost out on doubling your investments. 

How To Avoid Panicking 

There are some strategies you can adopt to avoid panicking during uncertain economic times. First, stay off speculation pages. Countless financial gurus like to scare people about market downturns. After all, these posts are what gain traction and generate views. By listening to reputable sources, you can avoid panicking. 

Another strategy is to set it and forget it. Once you contribute money to an investment account, consider it gone. You don’t need to check your investment balance every day or be concerned about market drops. By regulating your investments, such as through automatic withdrawals, you can stay away from panicking. 

Educating yourself about historical market conditions is also important. Since the S&P 500 was created in 1957, the average annual gain is 10.5%, according to Business Insider. It’s highly unlikely that the market will deviate from this average. While there may be years of double-digit losses, there will also be years of double-digit gains. 

Additionally, it’s important to remember your goals when you start to panic. Why are you investing now? Is it to retire in 20 years? Most people are investing for their long-term goals, meaning the daily or weekly market swings are immaterial in the long run. Investing is meant to be long-term, not for short-term gains. 

Finally, change your mindset. Do you love shopping sales? Think of stock market drops as a sale. It’s a great time to load up your investments and save money. Shifting your mindset is a top strategy for weathering uncertain economic storms. 

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