Suze Orman Fan Club Blog Community

Like most financial advisors, Suze Orman always advises folks under the age of 40 to invest for the long term, and to do it aggressively to avoid the detrimental effects of inflation.  Her book, The Road to Wealth teaches all about retirement planning, especially using the principles of dollar cost averaging.

Consider, however, the current market situation where the market has been dropping in a most hair-raising fashion.  Some individuals have lost over 50% or more of their equity, holding on all the while in the name of “It Will Come Back.” Most people over 55 are wondering how many years now it will be before they can retire, and some retirees are going back to work.

Is it any wonder then that some might question the sanity of a financial adviser who tells someone to invest aggressively if they are under 40?  After all, portfolios simply may not have the kind of growth that they have had in the past fifty years.  Perhaps we are entering the same phase as the Japanese, where it was so lackluster that very little growth happened at all.

Suze Orman’s buy and hold, and dollar cost averaging is not unlike many financial advisors.  This strategy is often not advocated by other market gurus who feel that better returns are available to folks who identify the sectors that will be on the rise, and then invest in them.  They scorn the investments for the average.

Whoever is right, the Orman type investment advisers or those who ride sector stocks, doesn’t really matter.  We may be entering a whole new phase of financial advising.  The market numbers may never be the same after last year’s market drop.  And if this country does steer into a depression, redefining retirement strategies will be critical for all advisers.

Visit Beth Rose’s Wear Many Hats for a different perspective for the informed investor.

Trackback URI | Comments RSS