Much may have changed over the course of the COVID-19 pandemic, but people having varying opinions on the financial markets remains constant. Financial advisor and media personality Suze Orman has her own take. And those who value her particular brand of common-sense money management will find a lot of comfort and familiarity in her observations on investing during the volatile days of this pandemic.
“You will never, ever, know the bottom. You will never, ever, know the top,” Orman advised, channeling wisdom many investors know to be true: long-term investment strategies are all about consistency. Which means, in Orman’s view, that as long as you do not have more pressing expenses, the here and now is no reason to abandon your carefully planned strategy.
Or, to put it in her words, “Just stay calm. I can guarantee you that if you stay in and you just stick with it, three years from now you will be very, very happy that you did.” While Orman may be a little more comfortable dealing in absolutes than the rest of us, the core of her statement echoes a truth that many are looking toward as a guidepost: Markets eventually recover.
While less inclined to put recovery and success on a timeline, experts Richard Eisenberg (Next Avenue editor), Terry Savage (finance columnist) and Pam Kreuger (co-host of PBS’ Moneytrack) discussed safe investments in a pandemic economy during a Friends Talk Money podcast. The key takeaway from that conversation is that the expert trio did not discuss if continued investment was viable, but rather, how to invest prudently.
Kruger and Savage have taken a shine to conservative stocks that pay reliable dividends. Why? As Savage explained it: “Going back to 1926, there has never been a twenty-year period where people lost money in a diversified portfolio of stocks with dividends reinvested, even with all the market crashes, and even adjusted for inflation.”
In terms of other favored cautious investment vehicles — bonds and target date funds — the experts were split in opinion, seeing pros and cons in nearly equal measure.
“The stock market will, at some time, come back,” said Savage, echoing the oft repeated stay-the-course mantra of investment experts. “But the question is: ‘How do you personally get through it?’ That’s the challenge.”
Krueger added a last bit of encouragement for anxious investors hoping for confirmation they’ve done the right thing by placing trust in their best laid plans and diversified portfolios. “Diversification wins all battles. Always has; always will.”
Stay smart and stay safe.
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