Why Suze Orman SHOULD be in Bonds, and You Should NOT

Suze Orman has been getting her share of criticism lately. Liz Weston has pummeled Suze for advising folks to make minimum payments on credit cards while building up an emergency fund. And now Orman is taking heat for investing her portfolio in bonds, while advising others to invest in stocks. For example, in what is without doubt the worst piece of personal finance journalism in the history of personal finance AND journalism, Helaine Olen takes a swipe at Orman (”Orman also urges people to invest for retirement in the stock market, while admitting the bulk of her savings is in municipal bonds.”) in an article called The End of Personal Finance. I love the use of the word “admitting” in that sentence, as if Orman were confessing to a crime.

The Orman “do as I say, not as I do” approach to personal finance advice underscores an extremely important aspect of investing–never accept more risk than you must. At last count, Orman had about $20 million invested in bonds. If I had $20 million, I’d put in bonds, too. Why? I wouldn’t need to take on the added risk of the stock market in order to reach my financial goals. So the fact that Orman has $20 million in bonds, yet tells us regularl folk to put our few thousands into stocks, is absolutely correct.

I’ll have more to say about Helaine Olen’s piece later this week, but until then, here are some truly fantastic articles and carnivals to check out:

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