'The Worst Idea I've Ever Heard In My Life,' Suze Orman Responds To Listener About Selling Everything Within IRA And Reinvesting

Suze Orman had some strong words for a listener who considered drastically changing her IRA's investment strategy. In a recent episode of the Women & Money podcast, a listener named Jane shared her concerns about the current state of the market and asked Orman if it would be smart to sell all her current IRA investments. 

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Jane said the idea behind this would be to place the proceeds into a money-market fund within the IRA, then dollar-cost average back into the market over time, assuming prices might decline shortly. 

Orman responded directly: "It's the worst idea I've ever heard in my life."

"Jane, don't do it," KT, Orman's wife and co-host, echoed Orman's sentiments. They quickly explained why they advised against this strategy. 

The biggest flaw in Jane's idea, according to Orman, was her assumption that the market would drop. No one can predict this with certainty. "You don't know that they're going to come down," Orman said. "They could continue to go up and up and there you are sitting on the sideline waiting for them to come down."

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By selling all of her holdings within the IRA, Jane would, in effect, be trying to time the market. Orman says this carries considerable risk, as there's no guarantee the market will drop and Jane could miss out on potential gains while she waits for a dip that might never happen. Orman highlighted that staying invested allows for continued growth opportunities, even during uncertain market conditions. 

Orman suggested that Jane focus on a more traditional approach by maintaining her current investments while adding new money to her IRA. She recommended that Jane apply dollar-cost averaging to her contributions, which involves investing fixed amounts regularly, regardless of market conditions. Many investment experts state that this approach can help reduce the impact of volatility over time and doesn't require trying to anticipate market highs or lows. 

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For Orman, dollar-cost averaging provides a balanced path forward that avoids making large, potentially risky moves to catch market downturns. Orman believes in a disciplined, consistent investment strategy that capitalizes on long-term growth and minimizes emotional responses to fluctuations. 

Timing the markets can be risky and Orman has maintained this stance. Financial experts often caution against this strategy, as it's notoriously difficult to predict movements accurately. Selling and reinvesting at the wrong times can lead to significant losses, missed gains and increased anxiety about market changes. 

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In Jane's case, even if her strategy resulted in a successful reentry at lower prices, it would involve a high level of risk and vigilance, something that Orman suggests could undermine her financial stability. 

Orman's advice focuses on a steady, long-term approach to investing. For those in similar situations with retirement accounts like IRAs, Orman emphasizes sticking to a consistent investment strategy and avoiding drastic changes based on predictions of what the market might do. 

If you want to improve or change your investment strategy, consider speaking with a trusted financial advisor. They can help you navigate the nuances of complex strategies and outline a plan tailored specifically to your unique financial goals. 

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