Stop picking on Suze Orman!
Posted
Feb 11 2009, 02:09 PM
by
Kim Peterson
Rating:
Oh come on, going after Suze Orman? Columnist James Scurlock tells people to stop trusting the "bottle-blond former waitress."
The thing that bothers Scurlock the most is that Orman is a big cheerleader for "dollar cost averaging," which he says is the practice of buying the same stock over and over again as the price drops.
"Since when does throwing good money after bad make you rich? It doesn't." Scurlock criticizes. Dump her as your financial adviser, he says. She doesn't even like stocks for her own money -- less than 3% of her net worth is in stocks, with the majority in government-backed bonds.
Scurlock is off base. For one thing, dollar cost averaging (DCA) doesn't mean buying the same stock over and over as it falls. DCA is a moderate approach to investing where you spend a set amount of money at regular intervals. In other words, you invest the same amount whether a stock is going up or going down.
DCA isn't the most sophisticated investor practice, by any means. And it has been criticized for not cushioning risk as much as its proponents would like.
But consider this: Orman isn't reaching out to sophisticated investors. She's targeting people who want to straighten out their finances, or maybe start building a nest egg. People who have too much credit card debt. People who can't budget their household income.
She helps motivate the Oprah crowd to think smartly about their money. And there aren't many advisers doing that for an audience that desperately needs this kind of advice.
So, James Scurlock, if you can dig up a real reason to go after Orman, then go for it. But as far as I can tell, she is bringing some common sense to a subject where Americans routinely have none: personal finance.
I wish there were more like her out there.
Related reading:
Devil's advocate: Ignore personal finance experts
When money writers don't walk the walk
