Suze Orman insists this is the smartest way to cope with inflation — what is it and are you doing it?

As inflation pinches pocketbooks and makes it harder to cover the essentials, many Americans are smartly turning to high-yield savings accounts as an effective if conservative way to secure and grow their money.

But just how smart is it? Personal finance expert Suze Orman has some blunt advice: Stay with stocks.

Even as the Dow, S&P 500 and Nasdaq rise and dip with anxiety-inducing volatility, Orman contends the stock market offers a more direct path to building wealth. Cash and bonds are safe, but Orman cautions that they can’t keep up with inflation.

“Over the long term, stocks have produced the best gains after factoring in inflation,” Orman blogged in 2021. “Bonds and cash struggle to keep pace with inflation; only stocks have a track record of earning more than inflation.”

Considering the Dow recently – and briefly – turned negative for 2023 in early October, it’s hard to blame average investors tempted to stampede the exits. And with inflation remaining untamed and the Fed signaling additional interest rate hikes, hunkering down with cash may seem inviting.

Orman, however, wants to assure stock skeptics that investing in the market remains the best way to deal with inflation. That’s a tough sell these days, but her advice to current-but-weary investors is this: Hold the line.

The nature of stocks means high real returns, which are earnings on investments after inflation and taxes. Other savings methods such as bonds or cash don’t account for the rate of inflation, which equals lower returns versus stocks. Orman explains that even in periods of poor market performance — and we’re certainly in one — the S&P 500 still outpaces today’s higher-yield savings accounts. And it’s not even close.

Now that Orman has laid out why you should invest your leftover pay in the stock market, let’s talk about how. Here are some ideas to consider if you’re ready to start investing.