'Be A Super Smart Stock Investor' — Suze Orman On Why You Shouldn't Fear A Market Dip

If you’re feeling uneasy about recent stock market swings, you’re not alone. With the market dipping more than 12% from recent highs in mid-April, many investors — especially those nearing or in retirement — may be wondering what to do next. But personal finance expert Suze Orman has a clear message: don't panic.

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Why Market Dips Are Normal

In a recent blog, Orman reminded readers that market corrections are part of investing. "The lesson," she wrote, "is to not let short-term turbulence steer you away from the long-term potential of stocks to deliver the inflation-beating gains to meet goals, such as retirement savings."

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History supports that advice. Despite the current downturn, the five-year annualized return of the stock market is nearly 16%, and the 10-year average is about 12%, according to Orman. While those returns aren’t guaranteed in the future, they offer an important perspective during tough times.

Stick With a Smart Strategy

Being a "super smart stock investor," as Orman puts it, doesn't mean trying to predict the next market move. Instead, it means building a long-term plan and staying committed to it, even when the headlines are alarming.

One of Orman’s core recommendations is to focus on index mutual funds or exchange-traded funds for the foundation of your stock portfolio. These are known as passive investments, which means they aim to match the performance of a market index, such as the S&P 500, rather than beat it.

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Why does she favor them? According to Orman, it’s not just about simplicity. It’s about cost and long-term performance.

The Power of Passive Investing

Morningstar's latest data shows that fewer than one in four actively managed funds beat their passive counterparts over time. One major reason is cost. Orman states that passive funds usually have much lower expense ratios — the annual fees that all funds charge investors.

While the difference might seem small, often around 0.45 percentage points, it can significantly reduce your returns when compounded over 10 or 20 years. And because these fees are deducted automatically, many investors don't even realize how much they're paying.

That's why Ormans says that index mutual funds and ETFs are often a better deal for long-term investors.

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Don't Let Fear Drive Decisions

It's natural to worry when the market drops. But selling at the wrong time can lock in losses and derail your retirement goals. Instead, Orman encourages investors to stay the course and focus on building a solid foundation.

A market dip can feel like a setback, but for long-term investors — especially those using low-cost index funds — it doesn't have to be a cause for alarm. By staying calm, keeping costs low, and focusing on the big picture, you can be, as Orman says, "a super smart stock investor."

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