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Is This The Start of a Bear Market? · Suze Orman's Women & Money (And Everyone Smart Enough To Listen)

• 0:07
  Suze: September 7th, 2025. Welcome everybody to the Women and Money podcast,
• 0:13
  Suze: as well as everybody smart enough to listen. Suze O here,
• 0:18
  Suze: and today is Suze School. But before I tell you
• 0:22
  Suze: about Suze School, tomorrow is September 8th. Did you know that?
• 0:26
  Suze: Of course you did. But did you also know that tomorrow,
• 0:30
  Suze: 15 years ago, Miss Travis and I got married in
• 0:35
  Suze: South Africa.
• 0:37
  Suze: So we will be celebrating our 15th wedding anniversary, and
• 0:42
  Suze: you may be thinking, but Suze,
• 0:45
  Suze: Gay marriage wasn't legal in 2010. Oh, it most certainly
• 0:50
  Suze: was in South Africa, and we happened to be there.
• 0:55
  Suze: I was speaking there, and we decided, let's just get married.
• 0:59
  Suze: And it wasn't until five years later, really that in
• 1:02
  Suze: the United States marriage equality came to be, but it
• 1:08
  Suze: is also possible if we are not diligent, everybody.
• 1:12
  Suze: Marriage equality in the United States may disappear, so do
• 1:17
  Suze: not take anything for granted.
• 1:22
  Suze: So now, before I go into Suze School, just want
• 1:26
  Suze: to make a few comments on these markets.
• 1:30
  Suze: Yes, they are volatile. They are going up. They are
• 1:33
  Suze: going down, and I will be the first to tell
• 1:37
  Suze: you that many of you most likely are going to
• 1:41
  Suze: get scared. And why? Because these are scary times and
• 1:46
  Suze: these markets can absolutely go down. They could go down
• 1:50
  Suze: another 10%. Why?
• 1:53
  Suze: Because of the tariffs, we don't know about them still,
• 1:57
  Suze: all the lawsuits that are happening in the United States
• 2:00
  Suze: of America, the possibility of a government shutdown, what's going
• 2:05
  Suze: on with Gaza, with Ukraine, there are many scary things
• 2:10
  Suze: happening out there.
• 2:12
  Suze: So, of course, you possibly could be reading the headlines
• 2:17
  Suze: and going, oh my God, we're in another bubble, everything's
• 2:20
  Suze: going to just crash.
• 2:22
  Suze: And
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  Suze: Will it, will it not? I don't think so, but
• 2:29
  Suze: I do think it is possible.
• 2:31
  Suze: That between now and maybe even the end of the year,
• 2:34
  Suze: who knows that these markets could go down. However, it
• 2:40
  Suze: is not unusual like with the internet bubble, and we're
• 2:43
  Suze: not in a bubble right now, believe it or not,
• 2:46
  Suze: but I am begging you for you to know that
• 2:49
  Suze: this near term volatility that we're all going to experience
• 2:53
  Suze: that's ahead of us is essentially a buying opportunity, and
• 2:58
  Suze: it is not the start
• 3:00
  Suze: of a bear market. Do you hear me? And that
• 3:05
  Suze: the truth of the matter is, all right, so maybe
• 3:08
  Suze: we won't end the year at 7,000. Maybe we're gonna
• 3:11
  Suze: end it with the S&P at around 6500. OK.
• 3:15
  Suze: But I can tell you, in my opinion, in 2026
• 3:20
  Suze: we're really going to see AI be adopted everywhere, just everywhere,
• 3:28
  Suze: you know, technologically speaking we're far.
• 3:31
  Suze: Advanced really if you think about it than we were
• 3:35
  Suze: in the 90s when the internet was just coming about.
• 3:39
  Suze: All of us now on some level do chat GPT.
• 3:43
  Suze: We're aware of all of this. Google everything, it's all AI.
• 3:48
  Suze: So it's just started to be adopted and very shortly,
• 3:53
  Suze: especially starting next year, we're going to see it be
• 3:57
  Suze: bigger and better in my opinion than anything that happened
• 4:02
  Suze: with the internet. So I'm just going to repeat right now.
• 4:06
  Suze: Don't be afraid of volatility. Make sure you keep cash
• 4:10
  Suze: on the sidelines. If things go down. Opportunity to buy,
• 4:16
  Suze: but this is not, this is not the start of
• 4:21
  Suze: another
• 4:22
  Suze: market in my opinion, OK, just think about that. All right.
• 4:28
  Suze: Are you ready for Suzy school? Let's take out your
• 4:31
  Suze: Suze notebooks because today I'm gonna have some numbers for
• 4:35
  Suze: you so you can compare.
• 4:38
  Suze: A little bit ago, actually on August 29th.
• 4:42
  Suze: Somebody by the name of Dr. E wrote in, and
• 4:46
  Suze: this is what he said, because at the end of
• 4:49
  Suze: his email he says one of the men smart enough
• 4:52
  Suze: to listen.
• 4:53
  Suze: He says, Dear Suze and KT, I recently noticed that
• 4:58
  Suze: my husband's workplace retirement account is committing highway robbery when
• 5:04
  Suze: it comes to fees.
• 5:07
  Suze: Now, the reason that I've chosen this to do a
• 5:10
  Suze: Suze School out of it is that there are many
• 5:13
  Suze: of you out there that have a 401k, a 403B,
• 5:18
  Suze: a TSP plan at work.
• 5:21
  Suze: And do you know the fees that your employer is
• 5:27
  Suze: charging within your 401k plan by the mutual fund that
• 5:33
  Suze: they've allowed you to choose, and you need to know
• 5:37
  Suze: because here's an example of it.
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  Suze: There are very few funds, he says, to be chosen from,
• 5:45
  Suze: and the lesser evil in the group is AANTX, which,
• 5:51
  Suze: by the way, everybody stands for the American 2060 Target
• 5:57
  Suze: Date Retirement Fund Class A. Now before I even go on,
• 6:02
  Suze: you know, I don't like target date retirement funds, and
• 6:06
  Suze: I'm going to show you why in just a few seconds, OK.
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  Suze: So
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  Suze: The group AANTX charges a 5.75% load on the front
• 6:20
  Suze: end and has an expense ratio of 0.73%. Can you
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  Suze: all write that down? A front end load of 5.75%.
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  Suze: And an annual expense ratio of 0.73%.
• 6:42
  Suze: He says this seems insane to me and may be
• 6:46
  Suze: even unethical. His employer only does a 3% match anyway.
• 6:51
  Suze: Is it worth it given the exorbitant fees, or should
• 6:55
  Suze: we just stick with the Roth,
• 6:58
  Suze: on principle instead of paying those crazy fees. Now just
• 7:03
  Suze: to answer, Doctor E quickly, no, just keep investing up
• 7:07
  Suze: to the point of the match, and that's it. Not
• 7:09
  Suze: a penny more because it's still free money. So here's
• 7:14
  Suze: what I first want to teach you in the Suze school.
• 7:18
  Suze: And I haven't taught this in a long time only
• 7:21
  Suze: because I thought for sure everybody would know about it
• 7:27
  Suze: and that people really wouldn't put people in loaded mutual
• 7:31
  Suze: funds anymore. They just don't make sense. So first of all,
• 7:36
  Suze: remember the 5.75% load that his husband had to pay.
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  Suze: Imagine now, write this down.
• 7:45
  Suze: That you invested $10,000. That's all.
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  Suze: And there was a 5.75% load which goes to who
• 7:56
  Suze: the broker who sold you the funds.
• 8:00
  Suze: Now what does that broker, financial person, the adviser have
• 8:05
  Suze: to do with the performance of that fund? Absolutely nothing.
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  Suze: It's like, for instance, you go and you buy a
• 8:14
  Suze: car and a person selling you that car makes a
• 8:18
  Suze: commission for doing so. Now the question becomes, what does
• 8:22
  Suze: that person have to do with the performance of that car.
• 8:26
  Suze: And the answer to that question is absolutely nothing. They're
• 8:31
  Suze: just selling it to you. Same thing with a financial adviser.
• 8:36
  Suze: If you buy a loaded fund, now number one, how
• 8:39
  Suze: do you know if it's loaded? It has the letter
• 8:43
  Suze: A or B on the back of their name. So
• 8:47
  Suze: in this case, the American 2060 Target Date Eetirement fund
• 8:52
  Suze: Class A means that up front
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  Suze: they immediately take out 5.75% to pay the financial salesperson
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  Suze: that sold you this fund. All right, now what does
• 9:07
  Suze: that mean to you? Let's go back to where I started.
• 9:10
  Suze: Let's just say you put in $10,000 in one lump
• 9:14
  Suze: sum in this fund.
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  Suze: The 5.75% of the amount that you put in comes
• 9:22
  Suze: to $575. All right, so let's just say on Monday
• 9:29
  Suze: you decide you want to buy that fund.
• 9:33
  Suze: You buy that fund and OK, everything's all right, but
• 9:37
  Suze: the next day you've heard this podcast and you go,
• 9:40
  Suze: I want to sell that fund, and if that fund
• 9:43
  Suze: has not moved one penny, it's exactly the same price
• 9:48
  Suze: as it was the day before, you would get back
• 9:51
  Suze: only $9,425. Why? Because $575 went like I said, to
• 10:00
  Suze: pay the financial advisor.
• 10:02
  Suze: You have to think about this. This fund has to
• 10:06
  Suze: go up at least five and three quarters percent just for you to break even.
• 10:13
  Suze: So you are already down five and three quarters percent on your money the
• 10:19
  Suze: second that you buy this particular fund that has this load.
• 10:25
  Suze: If you simply bought a fund known as a no
• 10:28
  Suze: load fund.
• 10:30
  Suze: Doesn't charge you to buy it. Doesn't charge you to
• 10:33
  Suze: sell it.
• 10:34
  Suze: If you bought it for $10,000 and you decided that
• 10:38
  Suze: you wanted to sell it the next day and it
• 10:40
  Suze: didn't change in price, you would get all $10,000 back.
• 10:46
  Suze: There's also something known as another type of loaded mutual
• 10:51
  Suze: fund called B shares, and B shares simply are they
• 10:57
  Suze: sell it to you under the pretense that there isn't
• 10:59
  Suze: a load, but there is.
• 11:02
  Suze: It's probably five and three quarters percent as well.
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  Suze: Not only is there a load.
• 11:10
  Suze: But there's also something called a 12B1 fee.
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  Suze: And it's actually more expensive in the long run than
• 11:19
  Suze: a share funds, so you have to know how these
• 11:23
  Suze: things work. Personally, I would never, ever, ever buy a
• 11:29
  Suze: B share fund. So if some financial advisor says, Hey,
• 11:34
  Suze: I have this mutual fund, it's not gonna cost you anything,
• 11:38
  Suze: and they give you the name and it has the
• 11:39
  Suze: letter B at the end of it, just get out
• 11:42
  Suze: of there.
• 11:43
  Suze: Don't do it. Don't do it. Don't do it.
• 11:48
  Suze: Now, that was one problem with what Dr. E is
• 11:51
  Suze: talking about here was the load. So lesson one, do
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  Suze: not buy a loaded mutual fund. If you're going to
• 12:00
  Suze: buy a mutual fund, simply buy a no load fund
• 12:05
  Suze: where there's no fee to buy or a fee to sell. However,
• 12:09
  Suze: I just want to put in a caveat here.
• 12:12
  Suze: You can buy a mutual fund or you can buy
• 12:15
  Suze: an exchange traded fund. I personally, as you know, if
• 12:20
  Suze: you've been listening, like exchange traded funds far better than
• 12:25
  Suze: mutual funds. And why is that? Cause mutual funds can
• 12:30
  Suze: only be bought or sold at the end of the
• 12:34
  Suze: business day.
• 12:36
  Suze: An exchange traded fund which is identical in its holdings
• 12:40
  Suze: to a mutual fund can be sold any time while
• 12:44
  Suze: the market is open. So I just want you to
• 12:48
  Suze: know that, however, in 401ks in retirement accounts, chances are
• 12:53
  Suze: you're only offered mutual funds.
• 12:58
  Suze: The expense ratio.
• 13:00
  Suze: In this particular fund, the expense ratio is 0.73%. Now
• 13:08
  Suze: that doesn't seem like a whole lot of money, but
• 13:11
  Suze: I'm going to show you in a second how much
• 13:15
  Suze: it really is. Now, why is there an expense ratio?
• 13:21
  Suze: An expense ratio simply pays the expenses, so to speak,
• 13:27
  Suze: of that fund to keep it running.
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  Suze: Because all funds and ETFs, by the way, have what's
• 13:35
  Suze: known as a portfolio manager.
• 13:40
  Suze: And that is like let's go back to the car
• 13:43
  Suze: example for a second. That is like the mechanic that
• 13:46
  Suze: fixes your car that keeps it running smoothly and of
• 13:50
  Suze: course you have to pay him or her, right? That
• 13:55
  Suze: is what the expense ratio is in a mutual fund
• 13:59
  Suze: or an ETF. The manager who's managing that fund gets
• 14:05
  Suze: paid to do so.
• 14:07
  Suze: In this particular fund, like I said, it's 0.73%. Now
• 14:13
  Suze: just put a pin in all of that for a second.
• 14:17
  Suze: Over all the years that I've been doing this, I've
• 14:21
  Suze: said to you, I don't like target date retirement funds.
• 14:28
  Suze: And a lot of you go, Why is that, Suze?
• 14:30
  Suze: It's so easy. I deposit my money and I never
• 14:33
  Suze: have to think about it again. Bingo, Do not be
• 14:37
  Suze: a lazy investor. Do not just say, Oh, this'll be easy,
• 14:41
  Suze: and I'm through with it. You have worked hard for
• 14:44
  Suze: your money. You have to make sure that your money
• 14:47
  Suze: works hard for you, and just putting it in a
• 14:50
  Suze: target date retirement account in most cases make no sense. Why?
• 14:56
  Suze: You don't invest according to age, everybody. You invest according
• 15:01
  Suze: to what's happening in the economy.
• 15:05
  Suze: So do you want all your money in the stock
• 15:08
  Suze: market if the economy is going down, down, down, everything's
• 15:10
  Suze: just going to whatever?
• 15:13
  Suze: No, not necessarily. Maybe you want more in bonds, especially
• 15:17
  Suze: if you know that interest rates are high and they're
• 15:19
  Suze: going to come down. There's times for bonds. There's times
• 15:23
  Suze: for equity. There's times for everything, but that's dictated by
• 15:27
  Suze: what's happening in the economy. And just because you're older,
• 15:32
  Suze: depending on your own financial circumstances, doesn't mean that therefore
• 15:37
  Suze: all the money in your retirement account should be in bonds.
• 15:42
  Suze: And that's possibly what would happen to you if you
• 15:46
  Suze: put the money in a target date retirement account, because
• 15:51
  Suze: as you get older to that date.
• 15:55
  Suze: They take you out of the stock market and put
• 15:59
  Suze: you more and more and more into bonds.
• 16:04
  Suze: And do you really need to be in bonds?
• 16:08
  Suze: Or do you need to be in stocks? Does it matter?
• 16:11
  Suze: And it does, but it depends on your individual circumstances.
• 16:17
  Suze: Doctor E's husband is probably only 30 years old because
• 16:24
  Suze: he happened to choose an American 2060 Target Date Fund,
• 16:29
  Suze: which is what his projected retirement date is in his head,
• 16:34
  Suze: which is 35 years from now.
• 16:36
  Suze: So he's probably about 30 years of age, so that
• 16:41
  Suze: means we have 35 years that this money may be
• 16:46
  Suze: in this fund. Let's just first look at and going
• 16:51
  Suze: back five years, that's all, just five years.
• 16:56
  Suze: What was the average annual rate of return for the AANTX,
• 17:01
  Suze: the target date fund, versus the Vanguard Total Stock market
• 17:05
  Suze: index fund. This is just going back five years, OK?
• 17:11
  Suze: The American fund that you're paying that 0.73% expense ratio
• 17:16
  Suze: for and the load averaged about 10.5 to 11%.
• 17:24
  Suze: The Vanguard Total Stock Market index fund, on the other hand,
• 17:29
  Suze: averaged over the last five years 15%. Now again, I
• 17:37
  Suze: want you to think about that. So that would have
• 17:42
  Suze: been quite a bit of money difference. Now let's compare
• 17:47
  Suze: apples to apples, all right? Let's just assume you put
• 17:51
  Suze: in $100,000.
• 17:53
  Suze: That's all you never put in any more money, and
• 17:56
  Suze: you did it for 35 years, OK, so they both
• 18:02
  Suze: did the exact same gross return of 10%. Let's say
• 18:08
  Suze: that is true.
• 18:10
  Suze: Do you know over 35 years that the Vanguard Total
• 18:15
  Suze: Stock Market Index Fund with an expense ratio of 0.04%,
• 18:22
  Suze: you would have $2,775,000. Not bad.
• 18:31
  Suze: That's what your 100,000 would have grown to.
• 18:34
  Suze: But the American Fund at the expense ratio, remember, the
• 18:38
  Suze: return of 10% is identical.
• 18:41
  Suze: The American Fund, because of the expense ratio of 0.73%,
• 18:48
  Suze: you would have only $2,226,000. That is approximately a five
• 18:58
  Suze: to $600,000 difference simply because of why not the performance
• 19:04
  Suze: of the fund but the expense ratio.
• 19:08
  Suze: So don't go telling me that a little expense ratio
• 19:13
  Suze: difference in this case 0.04% versus 0.73% doesn't make a difference.
• 19:23
  Suze: It matters big time and just so you know.
• 19:27
  Suze: As time goes on, obviously the American funds won't be
• 19:32
  Suze: returning probably as much as the Vanguard Total Stock Market
• 19:37
  Suze: Index Fund. But just let's assume over the next 35
• 19:41
  Suze: years they return the average of about 10 to 11%
• 19:46
  Suze: versus the 15 to 16%. Let's do one more example
• 19:52
  Suze: for you.
• 19:53
  Suze: Let's say you put in $100,000 and the Vanguard Total Stock Market Index Fund averaged
• 20:01
  Suze: about 15% for the next 35 years versus the American
• 20:07
  Suze: funds which averaged about 10% for the next 35 years.
• 20:13
  Suze: Do you know 35 years from now you would have
• 20:17
  Suze: approximately $13,300,000 in the Vanguard Total Stock Market Index Fund versus about $2,800,000 in the
• 20:32
  Suze: target date mutual fund. That's about an $11 million difference.
• 20:40
  Suze: Now I'm not saying that would actually happen.
• 20:44
  Suze: But it's possible because as you're getting older, that Target
• 20:48
  Suze: Date Fund is getting more and more conservative, so.
• 20:55
  Suze: Are you all understanding why I don't like Target Date
• 20:59
  Suze: Mutual Funds, number one?
• 21:02
  Suze: And why an expense ratio really really matters if you
• 21:08
  Suze: can put those two things together with every single investment
• 21:12
  Suze: you make that you ask the question before you buy something. Hey,
• 21:17
  Suze: is there a commission on this? Is there a load
• 21:20
  Suze: on this? Hey, what's the expense ratio?
• 21:25
  Suze: And just look at it and compare it to what
• 21:29
  Suze: the Vanguard Total Stock Market Index Fund has done over
• 21:34
  Suze: the past 5 years or so in comparison to what
• 21:37
  Suze: you're about to buy.
• 21:39
  Suze: I think the numbers will tell you what you should
• 21:44
  Suze: and should not be doing, and that is your Suze
• 21:49
  Suze: School for today. So there's only one thing that I
• 21:53
  Suze: want you to remember when it comes to your money,
• 21:55
  Suze: and it is this people first, then money, then things.
• 22:00
  Suze: Now you stay safe and secure. Bye bye now.