Investing

Suze Orman: 'Do not let these markets scare you — you want these markets to go down'

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Courtesy Suze Orman

It's normal to get nervous when the stock market gets bumpy. But Suze Orman, financial expert, bestselling author of "Women & Money," and the host of the "Women & Money" podcast, says not to fear the stock market's unpredictability.

Instead, Orman suggests embracing the stock market's ups — and downs.

"Just stick with it," says Orman. "Do not let these markets scare you. You want these markets to go down."

It may sound counterintuitive, but Orman says there's an upside to downturns: opportunity. "I was so thrilled in 2009, for instance, when there was a total decline of about 50% [because] I was able to go in and do what? Buy more and buy more," she says.

And while in the short term prices can bounce around, the 90-year average return for the S&P 500-stock index is 9.8 percent a year. That's why, she says, "as long as you're in good quality stocks, mutual funds, and exchange-traded funds, stick with it."

As long as you're in good quality stocks, mutual funds, and exchange-traded funds, stick with it.
Suze Orman
host of the podcast 'Women & Money'

Billionaire investor Warren Buffett also points out that you can come out ahead if you can ride out the market's ups and downs. "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful," Buffett told The New York Times in 2008, adding that he predicted equities would "almost certainly outperform cash over the next decade."

That's why the strategy Buffett swears by is buy and hold.

Howard Marks, the billionaire founder of Oaktree Capital Management, echoes both Orman and Buffett. Marks, who is widely considered one of the best investors in the world, spoke to a high school investing club in California earlier this year about why there's no need to fear a down market.

"Investors should be aggressive when prices are low," Marks says, "and defensive when prices are high."

You don't have to be a pro to tap into the market's long-term growth. Just be consistent. "Keep putting money in month in and month out," says Orman. "And in the long run, I think you'll be great."

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