Suze Orman Says Investors Need a New Perspective

It's time to take a new approach to checking your brokerage account.

It's fair to say that 2022 has been a tough year for investors. At this point, many people have been seeing losses in their brokerage accounts since January. And with inflation soaring and recession fears mounting, we don't know how many more months of stock market volatility to anticipate.

If you get increasingly stressed every time you log into your brokerage account and see a lower-than-usual balance on screen, you're in good company. But if that's the case, it's important to get a new perspective, according to Suze Orman.

It's all about changing your mindset

It's easy to look at your brokerage account balance and let it get you down. But during a recent podcast, Orman reminded investors to look at the big picture.

Yes, your portfolio may have lost value, and that's not fun. But if you're now seeing losses and feeling insecure about them, remember that those losses are only what you're observing at this very moment.

If you don't sell off any investments while they're down, you won't actually lose money. And so your best bet, Orman says, is to sit tight and wait for the stock market to recover.

Orman says it's also important to be long-term focused and remind yourself what you're investing for. If it's retirement, she says, and you have decades left in the workforce ahead of you, then there's really no need to get bent out of shape over current losses.

There's a good chance that in time, your portfolio will recover its value and then some. So rather than put yourself through the stress of seeing losses, don't check your brokerage account too often. Instead, find other ways to occupy your mind until the market more broadly recovers.

Make sure you're invested appropriately for your age

Of course, if you're a year away from retirement and you're seeing major losses in your brokerage account or IRA, you may, unfortunately, need to rethink your plans. That's why it's so important to make sure you're invested appropriately for your age.

If you're on the cusp of retirement, the bulk of your investments should not be in stocks. Rather, you may want a good 40% to 50% of your portfolio to be in safer investments whose value doesn't tend to fluctuate so much, like bonds. It's also a very good idea to have enough cash available to cover at least a full year of living expenses if you're very close to retirement.

But if you're looking at losses and you're 30 years away from leaving the workforce, Orman says you shouldn't let that worry you. Instead, keep saving and investing, and don't make any rash moves in your portfolio, like selling stocks when they're down and locking in losses for no good reason.

It's also a good idea to make sure your portfolio is diversified. If not, try branching out to different market segments so you have a nice mix. That, too, could make it easier to ride out the current wave of volatility -- and future waves alike.