Suze Orman, a renowned personal finance expert, is cautioning investors against relying too heavily on bonds. Despite the allure of high interest rates and a desire to avoid risk, Orman believes that these factors are preventing many people from seizing a “lifetime opportunity” in the stock market. Speaking on CNBC’s “Fast Money” podcast, Orman emphasized the need to consider investing in stocks, albeit not with all of one’s assets. She recommended dollar-cost averaging into stocks and taking advantage of market downturns. Orman stressed that those who choose to park their money exclusively in bonds would be making a significant mistake.
In addition to her financial expertise, Orman is also the co-founder of SecureSave, an emergency fintech company. She believes that long-term investors must be prepared for the fluctuations of the stock market and should have the stomach to weather its twists and turns.
Orman’s investment strategy is unconventional, as she expressed a desire to buy stocks that are currently performing poorly, hoping that they will decrease further so she can accumulate more shares. However, she does advise diversifying one’s portfolio and keeping a portion of funds in fixed income to mitigate risks in a volatile environment.
Nevertheless, Orman still recognizes the role of bonds in investment portfolios. She particularly favors three-month and six-month Treasurys and is considering longer-term options. Orman has already started dipping her toe into long-term Treasurys, mentioning that she buys whenever the 30-year Treasury yield crosses the five percent mark. Currently, the 30-year Treasury yield is near its 2007 highs and remained above five percent at the close of trading on Friday.