Suze Orman, known for her financial advice on the podcast “Women & Money,” recently shared a message she believes everyone needs to hear: It’s important to let go. Sometimes letting go is the hardest thing to do, whether it’s material things in your home you don’t need, relationships that are hurting you, credit card debt, or failed investments.
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It seems like a no-brainer to let go of failing investments, but Orman shares some insights into the emotional attachment some people have to their portfolios. She discusses the psychological barriers that prevent us from making smart financial decisions.
“How many of you, especially the women out there, have inherited a portfolio of stocks from your deceased husband,” Orman says. “And your deceased husband worked so hard on this portfolio. I loved these stocks; whether they were good stocks or bad stocks, it didn’t matter. But these were your deceased husband’s stocks. And now they’re yours, and you don’t want to sell them. You see them going down, they’re totally out of favor now… But you don’t want to let them go because of the memories.”
Even though the investments may not perform well, they can still have sentimental value to some people. But according to Orman, that’s a dangerous place to be, because if you hold on to such investments, you’re missing out on opportunities to grow.
Orman also shared that some people hold on to investments she recommended years ago that no longer perform well. She gave the example of the ARK Innovation ETF, which she once recommended. Many listeners, she noted, continue to hold on to that ETF even as its value has fallen, hoping for a turnaround. Orman candidly admitted, “I was as wrong as I could be, but you’re still holding on.”
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Orman’s main point of her message is that this reluctance to let go of bad investments stems from fear and a desire for certainty. We hold on to familiar things even when they no longer serve us because the unknown feels risky. But this mindset can lead to missed opportunities and greater financial losses.
While it may seem easy to some to let go of failing investments, holding on to these losers is more common than you might think. According to statistics from Tradeciety, many investors tend to sell winning investments while holding on to their losing ones. And traders often sell winning investments at a higher price than they sell losing stocks. About 60% of sales are winning, while the remaining 40% are losers.
Orman’s advice is clear: If you’re holding on to an investment out of fear, sentimentality, or hope, it may be time to reconsider. Financial markets are constantly changing, and holding on to the past can leave you feeling stuck and powerless. By letting go of failed investments, you open yourself up to new opportunities that better align with your current financial goals.
For personalized advice tailored to your specific situation, consulting a financial advisor can be invaluable. They can help you evaluate your portfolio and make decisions that support your long-term financial well-being.
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This article ‘You’re Stuck’: Suze Orman on Why Holding on to Failing Investments Could Be Your Biggest Mistake originally appeared on Benzinga.com
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