Suze Orman Just Sold a Bunch of Stocks and Did This Instead

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Should you follow her lead? 

It’s fair to say that the past 12 months have been brutal for stock market investors. And if you’re seeing losses in your brokerage account, you’re in good company.

Now, it’s not a good idea to just broadly start dumping your stocks out of panic during periods like the one we’re in. Doing so will likely mean locking in losses.

But it could pay to unload some of your stocks, especially if you think they aren’t poised for a recovery at all. That way, you can potentially minimize your losses and also free up money to invest in other assets.

One asset you may want to consider is T-Bills. In fact, financial guru Suze Orman might say that going this route is a really smart move.

Should you invest in government-backed securities?

In a recent podcast, financial expert Suze Orman talked about the state of the stock market and announced that she sold off a bunch of stocks herself. At the same time, she decided to put her money into short-term treasuries. And you may want to do the same.

When you buy short-term treasury bills, or T-Bills, you’re buying debt obligations that are backed by the U.S. government itself. And that means you’re really taking on very little risk.

When you buy stocks, there’s no guarantee you won’t lose money — and quickly, depending on how the companies behind them perform or what market conditions look like. But because T-Bills are backed by the full faith and credit of the U.S. government, you can rest assured you’ll be paid when you’re supposed to.

Many bonds work by paying you interest at different intervals. T-Bills work a little differently. When you buy T-Bills, you pay less than their face value, but then get their face value once they mature. As an example, you might buy $1,000 of T-Bills for $960. So if you then get paid $1,000 once your T-Bills mature, you’ve made $40.

T-Bills are generally sold in $1,000 increments. And you can buy them via the U.S. Treasury directly. T-Bills also have a maturity date of one year or less, and generally, the longer the maturity date, the more money you can make.

Are T-Bills right for you?

A lot of people are skittish about investing their money given the state of the stock market, and also given general economic uncertainty. Inflation and recession fears may be messing with a lot of people’s minds and making them worry about taking on risk in their portfolios.

If you’re not keen on buying stocks right now, you may want to look at T-Bills as a safer alternative that won’t cause you to lose sleep. This isn’t to say you should go and put all of your money into T-Bills. But if you were to invest a portion, it might serve you well.

That said, because T-Bills are a short-term investment, they could create a short-term tax liability for you. You may want to talk to a tax professional and get their input before moving forward with a purchase.

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