Women and investing – now’s the time to start

We look at how to start your investment journey and why there’s no better time than today.

 

Why is investing important?

Making the most of your money is more important than ever. However, there is still a gender gap when it comes to investing money and seeking expert advice about how to do so – meaning that women are more likely to lose out.

Women are becoming increasingly financially independent, and this shifting trend is fast paving the way for change in the way investing is carried out. They are set to inherit 70% - or $29 trillion - of the $41 trillion in global intergenerational wealth to be transferred over the next 40 years, and their global wealth is expected to grow from $13 trillion to $21 trillion by 2021.1

Women need to make investment decisions tailored to their needs. They have a longer life expectancy than men and will need to provide for their retirement. The rollercoaster experience of the stock market during the coronavirus pandemic has illustrated the importance of having a measured financial strategy that invests gradually in the stock market so that wealth is built over the long term.

The differing needs of women call for a transformation of an otherwise traditionally male-dominated area – as well as a traditionally underserved segment. 

As a woman, where do I begin?

Financial independence can come in many forms: primary breadwinner, business owner, new homeowner, retiree, recent divorcee, widower, beneficiary – the list goes on. Whatever your situation, it helps to have clarity on where to begin when it comes to investing.

Investing tends to your long-term financial needs, such as retirement planning, protection for you and loved ones, school-fee planning for children or grandchildren or saving to fund long-term care if you need it. And research has shown that women are better investors – and savers – than men.2  Analysis carried out by Warwick Business School on 2,800 investors over three years showed that returns for women investors outperformed men by 1.8%, with women showing long-term focus on shares with a strong track record while men opted for more speculative stocks.3  

Your situation will be unique to you, and this will determine your investment journey. Here are some golden rules to consider:

  • Think holistically about your long-term needs – a good starting point is to map out your long-term goals and how quickly you want to achieve them. Prioritise and plan according to the life you aspire to. This will ensure your investments are tailored to your objectives.
  • Higher risk doesn’t always mean higher reward – as the saying goes, steady does it. A well-diversified investment portfolio that is in line with your ability and appetite to take risks is the best place to start. Don’t let sudden market changes or biased opinions distract you.
  • Get expert help if you need it – speaking to a qualified financial adviser could help to kick-start your investment journey in the best possible way for you. Financial advisers have access to multiple sources of investment expertise and insight, which could hugely benefit you and ensure your investment portfolio is aligned with your needs and goals.

Speaking to an expert could help make sure your investments are on track to perform as you want them to.

It’s important to remember that there are risks when it comes to making investments and you could get back less than you invest. Rates of growth and income are not guaranteed and past performance is not an indicator of future performance.

 

1. https://www.capgemini.com/wp-content/uploads/2017/12/wealth-managment-trends-2018.pdf - page 23

2. https://www.fidelity.com/about-fidelity/individual-investing/better-investor-men-or-women

3. https://www.wbs.ac.uk/news/are-women-better-investors-than-men/