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Suze Orman’s not known to sugarcoat her advice — And her response to a listener’s question on a recent episode of her Women & Money podcast was no exception.
Jane, who called into the show, shared her plan to sell her IRA investments while the market was high, only to then buy back in once prices eventually drop. Orman’s reaction? “The worst idea I’ve ever heard.”
She warned against the pitfalls of trying to time the market, emphasizing that there’s a chance the market may never drop. Plus, in trying to predict if and when that happens, Jane could miss out on huge gains in the meantime.
However, Orman didn’t leave Jane hanging. She gave listeners some alternatives that could help buffer against market volatility — here are a few key takeaways that could apply to you.
What is dollar cost averaging?
Her first tip was that Jane should apply ‘dollar cost averaging’ (DCA) to her existing investments. In a nutshell, Jane should continue to invest a fixed amount at regular intervals. This strategy would allow her to buy investments at various price points, ultimately lowering her average cost over time.
Research supports this strategy: a 2023 Vanguard report found that while lump sum investing (or, investing in one big chunk) outperforms DCA 68% of the time, DCA outperforms holding cash 69% of the time. By sticking with DCA, Jane can avoid the pitfalls of exiting the market and missing potential growth.
If you like the DCA approach, you’ll be glad to know that with Acorns, you’re automatically using DCA every time you spend.
It’s simple: when you make a purchase on your credit or debit card, Acorns will automatically round up the price to the nearest dollar and place the excess in a smart investment portfolio for you. This way, even the most essential spending translates to money saved for the future.
You can also customize how you save and invest with Acorns plan tiers.
For example, with the Acorns Gold plan, you get access to Acorns Later, which is a retirement account designed to boost your savings for your sunset years. What’s more, you get a 3% IRA match on new contributions through Acorns Gold. You can also opt for the Acorns Silver plan, which provides a 1% IRA match on new contributions.
Plus, you can get a $20 bonus investment just for signing up.
Diversifying your IRA with alternative assets
While Orman didn’t say much more to Jane about how to approach her IRA, she has always been outspoken on the importance of portfolio diversification to mitigate investment risk.
If you want more personalized advice about your retirement, hiring a professional can help give you peace of mind that your retirement plans are on track.
The key? Find a reputable financial advisor you can trust.
WiserAdvisor connects you with vetted, FINRA/SEC registered financial advisors to help you understand your financial situation and plan accordingly for your retirement.
All you have to do is answer a few simple questions about your finances and goals, and WiserAdvisor will connect you with an advisor best suited to help you. After finding your match, you can set up a free no-obligation consultation to see if they’re the right fit.
Diversifying with precious metals
When the stock market is unstable, due to anything from geopolitical tensions or economic uncertainties, investors tend to flock to gold. Gold shattered record highs several times this year, with prices growing by more than 30% so far, in its best annual growth year since 1979.
You can invest in gold for your retirement with a gold IRA with the help of American Hartford Gold (AHG). This retirement account can help you stabilize your finances by allowing you to invest directly in physical precious metals rather than stocks and bonds.
By opening a gold IRA with the help of AHG, you’re building a more robust, diversified portfolio. You’re looking out for your future self while cushioning your retirement by diversifying your investments and stabilizing your finances at the same time.
You are eligible to get up to $15,000 in free silver and an investor guide when you sign with American Hartford Gold.
Diversifying with real estate
Both commercial and residential properties can offer consistent returns while acting as a hedge against inflation.
CBRE, the world’s biggest commercial real estate firm, is showing commercial real estate market recovery since the pandemic. For the first time in eight quarters, its global property sales revenue increased — with the US boasting a 20% growth rate. These could be promising signs for the market’s growth in the coming year.
Real estate for essential businesses, like grocery stores and health care facilities, is still popular because it has proven resilient to the broader e-commerce and remote work transition. Plus, you can invest with FNRP through your IRA.
One way to gain exposure to this asset is through First National Realty Partners (FNRP) provides accredited investors access to institutional-quality commercial real estate leased by major essential-needs retailers like Walmart and Whole Foods.
FNRP offers white-glove service and experts to investors, so you can engage with experts, explore available deals and easily make an allocation, all in one personalized secure portal.
Beyond commercial real estate, being a fractional investor in rental homes and vacation properties can also provide a solid stream of retirement income. With mortgage rates set to decline next year, demand may continue to rise across American housing markets.
You don’t need to secure a mortgage to take advantage of a market boom, though. Arrived is backed by world-class investors including Jeff Bezos, and its platform allows you to get your foot into the real estate market without any of the red tape and responsibilities of homeownership.
Arrived allows you to browse through their curated selection of homes, each vetted for their appreciation and income potential. Once you find a property you like, simply choose the number of shares you want to buy and start investing with as little as $100.
Diversifying with art
To further mitigate her risk, Jane could consider alternative assets that behave differently from traditional stock markets. One option is fine art, which has shown strong performance in recent years.
The problem is, buying art the traditional way can be complicated and costly. On a Women & Money episode in May, Orman cautioned, “you better know what you’re doing because chances are it might not be as great an investment as you think after all the costs.”
However, recent data shows it’s a potent diversifier with low correlation, and certain segments have even outpaced traditional investments. Take blue-chip contemporary art, which has outpaced the S&P 500 by 64% (1995-2023).
Platforms like Masterworks can simplify the process of art investing, allowing everyday investors to buy fractional shares of blue-chip artworks from iconic artists like Picasso, Basquiat, and Banksy. This makes it easier to diversify your portfolio without the complexity and cost of managing art investments on your own. Plus, Masterworks lets you invest your IRA earnings through its partnership with Alto IRA.
Masterworks even has a secondary market, too, where investors can buy and trade shares in blue-chip paintings. Through their 23 exits so far, investors have realized annualized net returns like 17.6%, 17.8%, and 21.5% (among assets held for longer than one year).
You can get VIP access and skip the waitlist here.
- See Important Disclosures at masterworks.com/cd.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
