Suze Orman, a renowned personal finance expert, is cautioning investors against relying too heavily on bonds. According to Orman, the allure of high interest rates and a fear of taking risks are causing many individuals to miss out on a “lifetime opportunity” in the stock market. Speaking on CNBC’s “Fast Money” this week, the host of the “Women & Money” podcast stated, “Some of these stocks – how do you pass them up? I mean, you have to go into them. Now, do you go into them with everything that you have? No. Do you dollar-cost average into them, and take advantage of [down] days? … Yes. You’ll be making a big mistake if you park your money forever in bonds.”
Orman, who is also the co-founder of emergency fintech company SecureSave, believes that long-term investors should be prepared for the stock market’s fluctuations and maintain an appetite for its ups and downs.
“I have some serious losers at this point. However, I don’t care,” Orman revealed. “I want to buy a stock, and I hope it goes down. And I hope it goes further down and down so I can accumulate more.” Nonetheless, she advises individuals to keep some money invested in fixed income to mitigate risks in a volatile environment.
While Orman emphasizes the importance of stocks, she still acknowledges the role of bonds in portfolios. Specifically, she favors three- and six-month Treasurys and is considering longer-term options. “The play may start to be in long-term Treasurys. So, I’ve started to dip my toe in. Every time the 30-year [yield] crosses five percent, I buy,” she stated.
It is worth mentioning that the 30-year Treasury yield is currently near its 2007 highs, having surpassed 5% at the close of trading last Friday.
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