Suze Orman Says Stay Invested Through the Fear
When the market goes down, the instinct is to get out, but according to Suze Orman, acting on that instinct is one of the most reliable ways to permanently damage your financial future. In a recent video, Orman delivered what she called a financial wake-up call, and the message at the center of it was direct: Fear is the primary obstacle standing between most people and the wealth they could have.
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The Historical Case for Staying In
Orman opened with data that reframes the entire fear conversation. Over the past 40 years, the S&P 500 experienced 33 up years and only seven down years. Every single one of those down years eventually recovered.
The long-term tilt of the market, she said, is always upward; downturns typically only last around 1.4 years on average, while up cycles tend to run at least five years.
That context matters because most investors who panic and sell don't just miss the bottom. They also tend to miss the recovery, which is often where the largest gains are concentrated in the shortest amount of time.
"The biggest mistake you will ever make is when you stop investing," Orman said. "You sell, you get out, you let fear dictate the moves — you will never, ever build wealth."
What Panic Selling Actually Costs You
Orman's clearest illustration of compounding destroyed by fear comes from a simple comparison she laid out for younger investors. If you put $100 a month into a Roth IRA starting at age 25 and invest for 40 years at historical average returns, you reach approximately $1 million by retirement. Wait 10 years — start at 35 instead of 25 — and that number falls to roughly $300,000. The 10-year delay costs $700,000.
That same math applies to panic selling during a downturn. Every month out of the market is a month of compounding that cannot be recovered. The loss isn't just the decline you avoided; it's all the growth that should have happened during the recovery.
The Roth Advantage in an Uncertain Tax Future
Orman also pushed hard on the account choice question, which she said compounds the fear problem in a different direction. Many people choose traditional pretax retirement accounts for the immediate tax deduction, assuming they'll be in a lower bracket when they retire. Orman called that assumption a mistake.
Tax brackets today are relatively low by historical standards. What they'll be in 20 or 30 years — particularly as artificial intelligence potentially displaces workers, reducing the tax base at the same time Social Security obligations are expanding — is genuinely unknown. The highest marginal tax bracket has previously reached 70%, she said.
Oman's conclusion: Contribute to Roth accounts now, pay taxes at today's known rates and let the money compound tax-free. Every dollar growing inside a traditional account is growing partly for the IRS. A Roth account grows entirely for you.
How To Actually Stay Calm Through Volatility
Orman's framework for managing the emotional side of investing is built around two principles. First, only invest money you don't need for at least five years, but ideally longer. When you know the timeline is long, a 20% decline stops being an emergency and starts being an opportunity to buy more at lower prices. The investor with a five-year or longer horizon is not in the same situation as someone who might need the money next year.
Second, dollar-cost average consistently rather than trying to time entries. Invest a fixed amount every month regardless of what the market is doing. When prices are down, that fixed amount buys more shares. When prices recover, those additional shares produce additional gains. The strategy is boring, repeatable and has outperformed most attempts at intelligent market timing over any meaningful time horizon.
Orman was equally clear about what not to do during volatility. Don't blindly park retirement contributions in target-date funds, which automatically shift toward bonds and conservative allocations as the target date approaches.
"You invest according to the economy and what's happening today," Orman said, "not according to your age."
A target date fund that moves heavily into bonds five years before your planned retirement doesn't care whether that's a period of strong earnings or a historic buying opportunity.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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