How should women invest their money?

Women are known as money-savers, but it’s time they seriously started venturing into investments. Let’s take a closer look at how women can do it.

For women, the significance of investments may vary depending on multiple factors. The investments of a single mother may differ from those of one living with a spouse. Also, the risk factors considered by a woman in her youth and a woman in her later years will vary considerably.

As per Forbes, depending on race and ethnicity, the gender pay gap can leave women 55 to 90% of what men earn, which obviously greatly hinders women’s abilities to invest. It is also a known fact that women tend to consult with their close family and friends to make critical investment decisions. And why is that? Is it a lack of confidence or a lack of knowledge about financial matters? Also, is there a particular age when women should start making investment plans?

To answer these questions, let me cite the example of Lakshmi Iyer, Chief Investment Officer, (Debt) & Head-Products, Kotak Mutual Funds. Lakshmi started her career way back when women in the field of finance were a rarity. She has confessed that the seeds of investment were sowed in her mind when she started taking tuitions in her 12th grade. Similarly, Priti Rathi Gupta, MD & Promoter at Anand Rathi Share & Stockbrokers Ltd. says, “During my college days, I used to look at my family investments and that experience made me curious about investing in equity markets. I got inspired and equity is a great place to be. The key to investing is-You don’t need a large sum of money, you can start with as little as Rs 500.”

So, what do these examples really imply? That investment mindset needs to be developed from a very young age. In fact, the very beginnings can be traced back to our home environment. It is crucial to embed in the minds of young children, especially, starting school, collegegoers that finances are meant to be managed economically and not without a thought. The Sooner the better, age is no bar.

Let us look at a few results from a two-decade study on Women in Investing:

• Women are less confident in their investing ability than men, though investing confidence increases with age.
• Women may lack confidence in their ability to invest, but they still tend to do it well.
• Despite earning 20% less, women have higher savings rates and retirement plan participation than men.

·?????Women trade 40% less frequently than men.

These results clearly indicate that women may be risk-averse, but they can get really good at it if they put their heart into it.

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How can women excel in Investments?

According to research by Fidelity – “because women are more likely to have good age-based?asset allocations, they achieve proper?diversification?to help protect their money, regardless of market condition.”

Your investment choices must be well-researched. Define strict parameters regarding your process of identifying where to invest and back it up with solid justifications. Plan to facilitate easy navigation of the market scenario, and do not succumb to changing financial trends at a whim.

Conclusion:

When you talk about investments, Warren Buffet is the first name that comes to everybody’s mind. It’s time we add another name to this enviable position – that of a woman!

Marissa Greco, a financial planner at Greco-Nader Wealth Navigation has rightly stated, “When women truly don’t understand investment risk, they do less with their money. They keep it in?savings accounts. This, of course, has risks of its own as the money kept in savings accounts earns such low returns that it can’t preserve purchasing power over time due to?inflation. Money put in the market, on the other hand, can beat inflation and substantially grow assets over time.” Thus, financial literacy is the first step in the journey of successful investments.

Times have changed and so have the perception of the role of women in creating strong monetary health in business and at home. Especially during the pandemic, women have risen to the challenges by going out of their way to support their loved ones and establish a strong presence in the investment market. If you have the zeal to venture into this space, dive right into it and experience the excitement and adrenaline rush that come with the territory. Investments are one hell of a roller-coaster ride and if you are up for it, there’s no stopping you!