This Is Why Suze Orman Thinks Investing Will Be More ‘Predictable’ in 2023

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It’s impossible to predict the future, but 2023 isn’t looking too bad to Suze Orman. 

Recently, on her podcast Women & Money, Suze Orman offered an interesting and hopeful prediction about investing in 2023. Here’s why she says 2023 is looking more predictable than last year.

A caveat

Before diving in, Orman reminded listeners that anything can happen. “All of us are vulnerable to nature. All of us are vulnerable to what Congress decides to do. All of us are vulnerable to what happens in Ukraine and where that goes. And who knows what can happen?”

“So, how do you protect yourself?” Orman asked. “You make sure that you have significant amounts of money invested in a way that no matter what happens, you are safe and sound. And one of those ways is really through what? Treasury bills or certificates of deposit.”

And with that advice, Orman shared with listeners how she believes 2023 may play out.

Another dip

“I still think for this market to really, finally one day turn around and go back up, it needs to go back down further,” Orman said.

The financial guru pointed to the Standard and Poor’s 500 (S&P 500) Index. At the time of taping, it was around 4,000. But, according to Orman, the resistance level is about 4,155.

Here’s what Orman means by resistance level: As prices rise, sellers are tempted to sell. However, buyers are less willing to buy. When those two things are happening at the same time, it’s called the “resistance point.” Since values only move upward when there are willing buyers, prices begin to drop.

Orman also said that she’s “really concerned” that 60% of the stocks in the S&P 500 index appear to be overbought.

That means most people who wanted to buy S&P 500 stocks have already made their purchases. Without that pool of buyers supporting higher prices, Orman believes they may be poised to fall.

And that’s good news for investors.

The flip side of the coin

If Orman is right and the market is positioned for another downturn, investors have the opportunity to scoop up stock in companies they believe have an excellent long-term outlook.

To that end, she suggests that listeners continue dollar-cost averaging into investments that suit their objectives. Dollar-cost averaging means investing a fixed dollar amount on a regular basis, regardless of where the price stands. For example, if someone is currently investing $200 per month, that $200 will buy fewer shares when the market is up, but when it’s down, their dollars will buy more. Over time, this strategy could lower the average cost per share.

Branching out

Finally, Orman suggested that particular exchange-traded funds (ETFs) may work out this year.

“The areas of the market for this year that are projected to do well are consumer staples, healthcare, and utilities,” Orman said.

An ETF is similar to a mutual fund in that the buyer buys a bundle of assets, potentially lowering their risk by diversifying their portfolio. However, ETFs generally track a specific index. For example, an investor may choose to invest in small businesses, stocks from a specific country, currency, or utilities. It’s stock from a specific sector that goes into their portfolio.

As Orman made clear, we live in a world that is impossible to predict. However, calling last year one of the more challenging investment years she’s experienced, Orman believes this year should be better.

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