Suze Orman Identifies One Exceptional Scenario for Selling Stocks at a Loss

Suze Orman has clarified a rare circumstance under which investors should sell stocks at a loss: when a company’s core business fundamentals have permanently declined. This guidance emerges amid growing market volatility, particularly in sectors like energy and defense, where asset valuations are increasingly sensitive to geopolitical shifts and supply chain disruptions. The recommendation centers on evaluating whether a company’s long-term viability is compromised. For instance, if a once-stable energy producer like CL=F experiences irreversible decline in production capacity or regulatory exposure, selling at a loss may be justified. Similarly, in the defense sector, a firm facing contract cancellations or technological obsolescence could warrant exit, even with a loss. Historical data shows that stock losses exceeding 20% in a single fiscal quarter are often tied to structural issues rather than short-term market swings. In 2025, the S&P 500’s energy subsector declined 31% year-over-year, while defense-related equities saw a 17% drop, highlighting the importance of fundamental analysis over emotional reactions. The broader impact includes tax-loss harvesting opportunities, particularly for those in higher tax brackets. Selling losing positions like AAPL shares—down 18% from their 2024 peak—can offset gains and reduce taxable income, provided the wash-sale rule is avoided. Investors with concentrated positions in volatile sectors must balance risk mitigation with long-term goals. Ultimately, Orman’s advice emphasizes discipline: sell only when a company’s future earnings potential is demonstrably impaired, not merely due to temporary market corrections.