Suze Orman Why Holding on to Failed Investments Could Be Your Biggest Mistake

Suze Orman, famous for her financial advice on the “Women and Money” podcast, recently shared a message she felt everyone needed to hear: It’s important to let go. Sometimes the hardest thing to do is to let go, whether it’s material items in your home that you don’t need, relationships that hurt you, credit card debt, or failed investments.

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It might seem like a no-brainer to let go of failed investments, but Orman shares some insight into the emotional attachments 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 stock portfolio from your deceased husband,” says Orman. “And your late husband worked so hard on this portfolio. I liked these actions; whether they were good actions or bad actions did not matter. But it was your deceased husband’s actions. And now they’re yours and you don’t want them. 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 investments may not perform well, for some people they may have sentimental value. But according to Orman, that’s a dangerous place to be, because when you hold on to such investments, you’re missing out on opportunities to grow.

Orman also said that some people keep investments that she advised them to make years ago that are no longer performing well. She gave the example of the ARK Innovation ETF, which she once recommended. Many listeners, she noted, continue to hold this ETF even though its value has declined, hoping for a recovery. Orman frankly admitted, “I was as wrong as can be, but you’re still holding on to it.”

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Orman’s main point of her message is that this reluctance to ditch bad investments comes from a place of fear and a desire for security. We hold on to familiar things even if 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 simple to some to ditch failed 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 losing investments. And traders often sell winners at a higher rate than they sell losing stocks. About 60% of sales are winners, while the other 40% are losers.

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Orman’s advice is clear: If you’re holding on to an investment out of fear, sentimentality or hope, it might be time to reevaluate it. Financial markets are constantly changing, and hanging on to the past can leave you stuck and helpless. 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 Failed Investments Could Be Your Biggest Mistake originally appeared on Benzinga.com

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