Here’s What Suze Orman Thinks You Should Do When Market Volatility Strikes

• Suze Orman advises investors to stay diversified and consistent through market volatility rather than panic selling.

• A 3-4% drop in the S&P 500 represents a mild decline that doesn’t warrant panic.

• Dollar-cost averaging removes timing pressure and keeps investors buying during market dips.

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Suze Orman, one of the most revered folks in personal finance, has it right when she encourages investors not to let panic take control when market volatility begins to take things up a few notches. Undoubtedly, far too many investors are quick to panic at the first signs of pain in the stock market.

If you’re already in a somewhat panicked or nervous state after a drop of just north of 3% in the S&P 500, you might be overinvested in risk-on securities, or perhaps you’re listening to too many horrific forecasts of bears who’ve emerged in recent weeks.

Undoubtedly, a 3-4% drop in the broad market isn’t all too much to get into a panic over. But if you think about what could happen and the bearish theses of some of the folks who are subscribed to an “AI bubble” burst scenario, such a mild decline (it’s more of a blip in the grander scheme of things, at least so far) might have you worried enough to sell off a few of your holdings, including the ones that might entail a decent value at current prices.

In any case, tempering your emotions and managing through environments that see markets put up a nasty losing streak, I think, is key to doing well over time in markets. Suze Orman takes things a step further by urging investors to stay diversified and consistent despite the ups and downs of markets. When volatility strikes, she also views patience and discipline as assets. Undoubtedly, it’s easy to panic sell at a time like this.

You’re probably already convinced that we’re in an AI bubble, given the number of times you’ve heard the term over the past couple of months. And whenever you’re convinced, as many of the bears are, it can feel dangerous to stay invested in the trusted stocks you’ve held onto amid the past three-year bull run in markets.

Of course, there are strong arguments for a lack of AI bubble as well, but whenever stocks are on the retreat, the arguments for it really do seem that much louder. But it’s important to keep things in check and consider the bigger picture. Orman thinks that the long-term mindset is key for investors, especially those who might have otherwise been scared out of markets at the first signs of volatility.

While a 3-5% decline (or 6-7% for the Nasdaq 100) might be the start of a correction, getting the timing right is incredibly hard, even if you’re a professional trader who does it for a living. Instead of timing the latest slip, which is still quite mild, by the way, especially when you consider the great run we’ve had since Liberation Day, implementing a dollar-cost averaging approach could be a smart idea to take timing completely out of the equation. If the markets dip, you’ll feel like holding off, but a dollar-cost averaging strategy would encourage you to keep putting a consistent sum of cash into stocks at lower prices.

So, as volatility and fear return to Wall Street, going by the Suze Orman playbook could prove beneficial. Instead of listening to the featured bear of the day on your favorite financial television show, perhaps playing the long-term game, continuing to buy steadily over time, and staying cool is the key to success through unnerving times like this.

Personally, I think Orman’s approach beats hitting that panic button and selling because you heard someone say we’re in an AI bubble that will burst a handful of times. Believe it or not, such bearish commentary does get to you, and it could nudge you off the right investment path.

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