Suze Orman Calls Hoarding Cash Due to Recession Fears ‘a Huge Mistake’ but She’s Wrong

I find much of Suze Orman’s advice to err on the side of caution. Given many of her viewers are in or closing in on retirement, I have no issue with a more conservative tilt when it comes to one’s personal financial plan, whether we’re talking about the percentage to draw down (Orman preserves a lower percent) from one’s nest egg, distaste for high-interest debt, or maintaining a slightly fatter emergency fund (eight months as opposed to six months).

While her more cautious financial approach may be less exciting for younger viewers who may be inclined to be okay with outstanding debts, with a willingness to bet on exhilarating growth and momentum stocks or leave a bit less of an emergency financial cushion, I find her long-term approach to be more than worth getting behind. 

Though Suze Orman may be somewhat cautious relative to financial guru peers, most notably Dave Ramsey, she is no fan of cash-hoarding due to recession fears.

Indeed, timing the market is a bad idea—the market will have no problem leaving you behind if you’re not invested. Still, having some cash sitting on the sidelines, I believe, can be a good thing if valuations on stocks are stretched and you envision yourself buying more shares of companies come the next inevitable market correction. 

Is having a cash pile really a “mistake”?

While I’m not against staying invested (for the most part) and sticking with a long-term game plan, I think it’s up for debate as to whether it’s a “huge mistake” to have some amount of cash in a high-yield savings account (HYSA), just waiting to be put to work when opportunities in the stock market are more abundant.

For the most part, sitting in cash and shying away from stocks due to volatility isn’t the best idea, given it’s impossible to time the market’s ups and downs. That said, if you deem stocks as expensive and you sense bubbles in some parts of the technology sector, I’d argue that having a cash position apart from your emergency savings is not the worst idea in the world. 

Now, I’m not an advocate of timing markets and waiting for corrections. The opportunity cost can be pretty high, especially for younger investors who should concentrate more on stocks than bonds.

That said, if you’re an older investor who’s already quite heavy in stocks and you can’t sleep at night because you’re wondering why Warren Buffett’s Berkshire Hathaway (NYSE:BRK-B) is hoarding a record cash pile, I’d argue that having some dry powder can come in handy, especially if the stock market rally begins to run out of steam.

Here’s when having some cash on the sidelines can make sense

The stock market may have returned 20% for two straight years. But let’s not get too used to these types of returns—it simply cannot last, regardless of how incredible AI’s potential is!

If you find a lack of bargains, you don’t need to buy stocks or an index fund at prices you’re not comfortable with. And though it’s important to be mindful of inflation, I do think some HYSA products out there make it less costly to hold cash, especially through periods of excess market optimism.

With rates on the 10-year note creeping higher (now above 4%), perhaps settling for interest in savings with a small portion of your portfolio isn’t the worst move in the world. As rates rise, the case for checking near-4%-yielding savings accounts with certain financial institutions, banks, neobanks, or fintech firms could make more sense for a portion of one’s portfolio.

While I wouldn’t be rushing to cash as the market rally continues through 2025, I do think that those lacking new investment ideas shouldn’t be ashamed of keeping their powder dry. That way, if a market correction does hit, you’ll be able to act at a time when many others may be lacking in liquidity. As always, find the right asset allocation that fits your unique needs and consult a financial pro for advice on how much cash would be best to keep sidelined in a HYSA or something similar.

The bottom line

In short, Suze Orman is right to urge investors not to time markets by hoarding cash. However, I do think having some dry powder isn’t all too bad of an idea, provided the equity risk premium is on the low side and savings account yields are attractive as they are in today’s environment.

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