Suze Orman: 3 Ways To Not Let Emotions Reduce Your Investment Returns
November 30, 2025
Emotions play a role in investing for many people. Although understandable, emotion-based decision-making traditionally doesn’t deliver the best returns. For the decade through 2024, investors in mutual funds and exchange-traded funds (ETFs) had a 1.2% lower return compared to the return of the given investment, according to Morningstar.
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The reason for the difference? Mistimed trading is the culprit. While seemingly minor, the difference can amount to tens of thousands less in a portfolio over the years.
Personal finance expert Suze Orman is well known for her promotion of prudent investing. In a recent article on her website, Orman shared simple but effective tips Americans can use to prevent emotions from eroding investment returns.
Here are three methods to guard your portfolio against needless losses.
Allowing the headlines to direct your investment decisions can be a costly mistake, particularly during turbulence. Selling stocks during a downturn, while understandable, locks in losses. Worse yet, those who stay on the sidelines may lose out on the upswing that follows.
The market tumult in April, resulting from President Trump’s tariffs, is a perfect example. Stocks rebounded, erasing losses in most cases. Orman recommends against headline-style trading.
“I hope you resisted any urge to sell stock holdings during the worst of the market declines earlier this year. Once you lock in lower values, you can’t easily make them up. And the markets have delivered a quick reprieve: those early losses have been made up,” said Orman on her site.
Troublesome times can be a good time to reassess your risk tolerance, but don’t let the headlines throw you into quick, unplanned actions you will later regret.
It’s natural to check your investment portfolio, but looking at it too often can rattle your nerves. Doing so during a tumultuous time in the market makes matters worse. There needs to be a balance between looking at your investments multiple times a day and ignoring them. In fact, forgetting about your portfolio can be as bad.
“I am not advocating that you can just set your portfolio and forget about it. We all need to be engaged custodians of our retirement security. That means having an asset allocation strategy … and then checking your portfolio at least once a year to make sure it still reflects your goals,” noted Orman. Find an interval that works for you and stick with it.
“Don’t put all your eggs in one basket” is a common saying for most Americans. The idea is to wisely spread your resources to avoid exposing yourself to unnecessary risk. Being properly diversified helps contain overall portfolio losses, according to Fidelity. Orman argues that diversification doesn’t just apply to investing — it applies to your entire financial life.
“To have all your financial future riding on a single asset, real estate, is just as dangerous as only investing in the stock market. Or only investing in tech stocks. Diversification is its own form of powerful insurance: By spreading our financial future into different types of investments, we buy ourselves protection if one (or more) falls into a pothole,” Orman said on her site.
Speak with a trusted financial advisor to learn how you can wisely diversify your investments now and in the future.
Controlling your emotions is an essential part of investing. Trading on emotions commonly hampers returns that can have long-lasting effects.
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This article originally appeared on GOBankingRates.com: Suze Orman: 3 Ways To Not Let Emotions Reduce Your Investment Returns
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