Suze Orman TwitterSuze Orman FacebookSuze Orman YouTubeSuze Orman LinkedIn
View Blog & News List

The Best Investment Move You Can Make Right Now

October 20, 2016 at 12:00 AM

It’s been a great stretch for investors. Stocks have gained more than 250% in the bull market that stretches all the way back to 2009.

 I am always a big believer that dollar cost averaging-investing on a regular basis-is a great strategy for long-term investors. So don’t take what I am about to say as a reason to give up on stocks: Returns over the next seven to ten years probably won’t be as good as what we’ve had the past seven years. That’s just the ebb and flow of investing; now that stock values are much higher, there is less reason for stocks to continue to outperform. Again, I want to be very clear: if your investment goals are at least ten years into the future, you want to stay committed to owning stocks. Over time they are the best opportunity to earn inflation adjusted returns. 

That said, the best investment move you can make right now is to cut the cost of investing:

Lower the Fees You Pay on Your Funds. Yes, this is always an important step, but it becomes extra important right now. All mutual funds and exchange traded funds charge an annual fee called the expense ratio that is deducted from your fund’s performance. If your stock portfolio earns 10% and it has an annual expense ratio of 1%, your account only grows by 9%.  

Sure, 9% is still pretty great. But what if your stock fund earns 5%?  If the expense ratio is 1%, you earn only 4%. That’s a 20% reduction in your earnings! If your fund earns 1% and you owe 1% in fees, you’ve just wiped out your gain. And in down markets, you keep paying the expense ratio, so the more expensive your fund or ETF, the bigger the hit. 

So here’s the thing: It has never been easier to own funds and ETFs with super-low expense ratios. Investment firms such as Vanguard and Fidelity have many options that charge 0.10 percent or less. If you invest through Schwab, it has ETFs that charge less than 0.05% Discount brokerages such as TD Ameritrade offer a lineup of ETFs that include plenty of options with expense ratios below 0.10%, and that TD Ameritrade waives the commission on. 

 If your portfolio is full of investments that charge 1% or more, I am telling you that the best move to make today-and that will pay off for the rest of your life-is to focus on lowering your costs. Paying less in fees means keeping more of your money growing for your future. And that’s extra important for the times when market returns are low, or even negative. 

If you invest in tax-deferred accounts such as IRAs, or a 401(k), you can move your money into new funds without having to pay any tax. For regular (taxable) accounts you need to be careful, as any exchange means owing tax on gains from the fund you’re leaving. If you don’t have any investments with losses that you could also sell to offset the gains, then just focus on making all your new investments in low cost funds. 

Tag Cloud

high down paymentsidelinedConventional loan PMIlong-term care costly legal universal college accesscomparison shoppingAmericans don't use all paid vacation timeLong Term Care shoppingFederal PLUS loanjanuary billsalternative FICO scoreverify wellness screening and programsVital Documentsco-sign know before you owecalculate dependents annual income needscredit uniontraditional vs roth 401(k)Financial Gift CliffFinancialLong Term Care Insurance Richcut monthly cable billis it true? compare provider pricingAdequate Auto and Home Insuranceinterest on student loansMoneyclosing disclosurestay positiveMinor Children SelectQuote.comfile asapLifestyleclosing feeslower overall drug costanticipated salarysmall changes don't defer interest paymentscollege graduateprescription tier3 step financial road mapCredit Card Rate Increasepercentage men widowed 75-8440% toward financial goalBankruptcypeace of mindallowanceCombo Insurance Productssuccesslower rateorigination feeseight month living expense Heartyours, mine & oursmarriage financial responsibilityholiday spendingdoctors in networkmax employee matchno splurge protect loved ones credit reportitemized deductionFinal Goodbyeretirment savingsburn outFinancial Advicedental savings planEasy Life Insurance reduce monthly paymentno life insurance financially irresponsiblepay more than minimumbuying car 2016better termspercentage of women widowed 75-84insurance mistakesecured cardRevocable Trustmonthly benefit children's bookhome budget after tax costtax ID theftshort term goal only refinance if it paysemergency fund Newtowndon't ignore open enrollmentFinancial Solutions For YouFHA loan feesdebit cardbill paying prioritiesrefinancepaid vacationprofessional advisorExhibitionnegotiate points with bank or sellerStudent Loanretirement accountsHigh FICO Score = Better Ratesame-sex marriageFICO credit score credit card mortgagerolloverLong Term Care premiums10 year repayment plan LoveFICO Scoreis it necessaryignore 6 month grace period Durable Power of Attorney for Health CareHSA tax savingsinterest capitalizationget health insurancebig results commissionsgift up to 14,000Wall Streetbreakdown projected monthly housing costtitle insuranceborrowing plan borrow each year, capitalization is going to pile up don't blow tax refundstore credit cardsFree Debt EliminatorHigh Credit ScoreSuze approveddon't extend mortgage costly insurance mistakeHow To Build Creditretirementdon't derail retirement savingsdear suzemeet monthly focus on needsMost Influential Celebrities Listbalance transfer is it necessary?provider of financial supportovercome financial fearsterm life insuranceInfluential CelebrityFederal Reserverequire chore in exchange for allowanceverify retirement plan with HR or plan sponsorescrowCredit scorefinancial fearsbuy home you can afforddebt3% debt transferred Employer Matched Contributionrent vs buydream schooljuggle multiple financial goalsdon't spend roth iralife insurancefinancial goal phrasehome ownershipengaged in financesno retirement funds for down paymentback door Roth IRAmortgage brokerSpendingfocus on new truth public service loan forgiveness programbe good exampletake actionrequired disclosureCPI-Wno private loansgrandparent IRA contribution no apologyBaby Boomerstelevision hostAARP Social security calculatorcnbc alarm clockwrite new goal30 year mortgage Holiday Shoppinglife insurance name trust as beneficiaryDeath BenefitGiftprotect your familyhousing marketterm insuranceadvice for college graduatesbe true to yourselfpay off debt19 years cash flow problemdon't buy wants2016 adjust estimated taxleave a legacygift grandchild IRA contributionprotect and provide for minor child community collegepay interest while in schoolonly offered while employed low credit scoreGraceloan no longer than 36monthsletter to suzeInterestsocial securityadult childrenplando you need life insurance20 year level term higher monthly paymentsavings pleasurePersonal Financelive below your meanssummer job match income women outlive menInfluentialsspeak new goal20% down paymentpay down car loanpremiumpay credit debt ASAP15-year refinance deallong-term care premiumsincrease emergency savingscar buying mistakesCD'sfinancial independenceoverspend on dining outfinancial concernHoliday Seasoncommitmultiple lenderspreexisting condition not coveredUrbana-Champaign20 to 25 times annual incomeWashingtongraduationapproved medical 100% tax-freebuying a carmental healthMarlo Thomasmoney vowsUniversity of Illinoisloan is giftcompare monthly expensescollege studentSave Us Moneyhome buying mistakesshorter payback periodfederal student loan deferment raising interest ratesaffordable premiumpositiveFinancial Educatorloan big picture full retirement agedo not pay allowance for good behaviorVeterinary Schoolemployer offered life insuranceoverspend on giftscontribution one annual feeMust Have Documentsvalentines dayRetirement Savings740 credit scorehealthy aging identity fraudcouple financesno waiting periodhigh deductible health care planhealthy youRevocable Living TrustmortgageSandy Hook Elementary SchoolFederal Stafford loanclosing costs 2% of loanretain separate credit cardsnear historic lowswomen long term carewomen live longersave school budget401Khealthy teethGay Rightshealthy retirement weightFRAspring summer save moneyraise your deductible15 year mortgageEric Dodge bad retirement planninglong term goalStock InvestmentsTelepicturesmoney-aware childno sneaking in feesPhyllis Shelton expert long-term careInflation BenefitAccuQuote.comSelfishcan you afford itHDHP/HSAbest interest rateshigh credit score discountloved ones dependent on incomefour steps to retirement savings doctor no longer in networksocial security not going brokelet them have 50% controlSuze changed my lifenot enough life insuranceadd teenunexpected expense20% equityAlarm Clockage appropriate chorelowest cost fund optionCOLAcontribute household expenses One Wallet At A Timeidentity theftbetter loan dealseliminate credit card debtCredit Card Interest RateMoney-Savinglow down paymentmarriage inequalitycreate new truthoverspend on nights outStudent Debtallowance taskdangerous retirement planfinancing car Satisfyingbest interest of investoremotional stakespresident Obamaautomatic withdraw to savings file taxes quicklyForbesMoney Marketworkaholichigh FICO scoreage appropriate goalsdon't cover cosmetic dentistrykeep a schedulebecome member New american Dream quick closingautomate student loan paymentsretirement planreal estate mistakesstudent8 RulesHolidayworst financial mistakeinsurancenot gender specific powerfulemergency fund savingsGoodbyesocial security never insolventGiftsdeath benefit needs for familyshop online guaranteed level term policylower mortgage interestpay down student loan debtFICO at least 720women longer life spanWarner Bros Television Groupbuy down student loan debtswitch to roth 401(k)best loan deal Mass MutualAARPstudent loan repaymentWillSwap Older Annuities or Life Insurance no interestpay 100% cashpublic service career student loan repayment PBS Specialdon't use allowance as bribecar leasingloan necessityForeclosureFinancial Cliffderailed planwaive home inspection bidteens and moneyproperty taxmax employer matched 401(k) contribution50 over 50ARM Cautionconfident of solutionstudent loan repayment estimatorHDHP's are good for youno fee transferMortgage Credit Availability IndexaffordabilityLTCi ASAPSchool of Social WorkFixed Rate MortgageAuto Savings debt freeritual schedulecommunity bankpaid in fullmax benefit coveredSuze Orman spouse Kathy TravisPrime Rate Increaseteensinitial tax break annual cost of living adjustmentreduce interest rateautomatic paymentcost of capitalization calculatorsame sex marriage band end Floridasecure creditemployer funding HSAno late fee buy homeCommunication Skills no negativitylow mileage discountrepay student loanspoint cost offset by savingsat worst still pay 75% benefitdepreciating asset protect dependent increased auto insurance premiumcar loanrefundpurely financial standpointteach importance of helping othersno tax on withdrawlsstandard rateno private loanmortgage interest tax deductiontaxesPrime Rate Rise 2015referrals death benefit 20 to 25 times annual incomesuitableget over life insurance phobiaalways use all paid time offcredit cardswitch to spouse coveragedangerous money seasonIRA contribution gifted moneysocial workRetirement IncomeYoung Adult Teachstudent loan repayment planlearn good financial choicesgrandchild summer job IRA contributionopen enrollment review dental discount planPost-DivorceLTC shoppingface your financial fearcredit utilization rateget the most out of social security don't do five year car loaniffy incomehigher insurance deductibleCNBCbe kind to yourselfChanging Livesheartachegay marriage ban end Florida !00% tuition paidStudent Debt Crisis8 month safety nethome loan credit score below 740 lower premiumraise deductiblesincrease retirement contribution rateEmergency Savingsenjoy saving home related tax break bonus increase retirement savings20% down payment avoid feesCollege of Veterinary Medicine2015 financial roadmapRoth 401(k)monthly dental insurance premiumMotherUniversity of FloridaCiti Simplicity Card 6 month waiting period3 savings buckets rising home pricesFinancial Systempay high rate off firstmanage student loansfamily save at least $100 monthlyearn more on savingssetup automatic savings withdrawthree year car loansavingsmortgage disclosureBeauty2017 Taxesphysical healthStaffords this year have a fixed 6.8% interest rateThe Suze Orman ShowCory Booker2016 adjust withholdingresponsible with moneydon't charge a pennyunder 18 financial gifthome buying seasonavoid burn outpermanent life insurancestrained relationshipCommencementis it kind?paying for collegeback-to-school budgetmaintain standard of livinghome buying budgetfiduciaryPay Off Debt Before Retirementhealthy retirement blood pressurefinancial argumentswives should be involved in retirementunsubsidized Stafford loannon conventional routecharges on credit cardFinancial Power of Attorneyhighest possible benefitInvest for savings growthSuze Ormanresponsiblelow-cost index mutual fundkids schedule paymentsHDHP kid borrow firstlousy investmentUS Tax CodeSuze Orman Scholarshipcredit managementraising mortgage rates long term caretoo expensive schoolbad decisionsone credit cardhome insuranceHDHP'shigh premiums401(k) Contributionsschedule vacationSandy Hook Promiseadjust allocations Fiscal Responsibilityvalue moneyAmy LacyetHDHP's are not badconfidentAshley SpringerFinancial Awareness Video Festivaldental insurance ETF'sLegal Guardian10% donate to charityearn allowanceincentives for health care wellness screeninginsurance yearly reviewstretch out haircut appointmentsraise insurance deductiblecut monthly cellular billreplace permanent life insurance with termultimate compounding giftnew carJose RodriguezBill and Pennyzero rate transfer dealsbetter loan ratesaccelerate dental workspecial saving account4 Must Have Documents get credit cardSuze is my biggest mentortax refund fraudreduce withholdinglower interest rateexercise reguarlystandard deduction gift not loanreal estate marketOverspendingGay Coupleswould you decline a bonusmake saving a pleasureCivil Rightsfraudulent returnfinancial aidLTC3 bucket approachNew York LifeBankhealthy gumsARMmobile apppush yourself to save more for retirementForbes Top 10Suze Orman's Money Warsconsider roth 401(k)Federal Funds Ratestaycation2015 record year car salesFinancial AwarenessFundschildren under 18teach your child good money habits8 month emergency fund


View Blog & News List
People First. Then Money. Then Things.
Connect with me on Facebook Connect with me on YouTube Connect with me on Twitter
© 2017 Suze Orman Media Inc. All rights reserved.
 
 |  Search  |  Sitemap  |  Privacy  |  Terms
Sign Up For E-mail Offers
Open Panel
Close Panel