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Index Funds
Orman emphasized the importance ofinvesting in index funds.
These funds mimic the performance of a specific market index, offering diversification.
Its about making regular monthly, quarterly or semi-annual investments.
Orman also insisted ondollar cost averaging (DCA)when investing in the stock market.
DCA is regularly investing a fixed sum of money, regardless of market conditions.
This strategy helps mitigate the risk of market volatility and eliminates the pressure of trying totime the market.
Exchange-Traded Funds (ETFs)
Apart from index funds, Orman prefersETFs over mutual funds.
Mutual funds, however, tend to settle at the end of the trading day.
When choosing between ETFs, Orman likesVOO over SPY, though she believes either choice is fine.
Without a deep understanding of the company and its market, its easy to make costly mistakes.
Orman offered an alternative:dividend stocks, mentioning Whirlpool (WHR) as a potential option.
If your answer is no, Orman advises selling.
If its yes, hold on.
And if youre unsure, consider selling half.
This approach prevents emotional decisions and helps you stay in line with your financial goals.
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