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Women and investing. These two words are rarely found side by side. The word ‘investment’ tends to be viewed with a masculine bias. A glimpse at the stock exchange office conjures the image of a male-dominated environment. Prevailing stereotypes is not helping either. The media often depicts the investor as a man in a suit monitoring a stock chart from his gadget.
If we consider the current situation, investments can be an excellent aid for women. By entering into investments, women would be able to generate additional cash flow to close the gender pay gap. Here’s a brief guide on women’s guide to investing!
Increasing trend of women investing
Now more and more women are getting involved or are developing interests in investing. There are so many untapped opportunities for them in the investment world. A study about women and investing by Fidelity shows that in the United States, for example, at least 67% of women are now investing outside of retirement. This number shows a significant increase compared to 2018 (around 44%).
In addition, the age range is quite varied. The first position is occupied by women in 25-40 (71%), followed by the 41-56 group (67%), and the last is 57-75 years old group (62%).
The Covid-19 pandemic boosted female adoption of investing platforms
The same report also states that 50% of women have shown stronger interests in investment since the outbreak of the pandemic. Around 42% of participants stated that they now have more to invest since the beginning of the pandemic.
This suggests that there are plenty of good opportunities for women to start investing in. Moreover, a survey conducted by Fidelity also shows that over the last ten years, on average women investors perform slightly better than men by 0.4%.
More women acted quickly to prepare for the uncertainty
Meanwhile, according to a survey about women and investing by JP Morgan, it is more natural for women to be savers than investors. Out of 4,000 women across 10 European countries that were surveyed, only 18% of them invest regularly.
Though this is actually a good sign. It means that women are well prepared to face uncertainties. However, women, like all other investors, need to know the importance of diversifying their portfolio and equip themselves with other financial buckets beyond savings, from building emergency savings to updating financial plans and evolving roles from savers to investors.
Women who invest and have a financial plan are more confident and more secure
There’s a belief that women tend to think long-term compared to men. In terms of investing, that’s a good trait since it can lead to better decision-making.
The same JP Morgan study also states that 78% of women who invest also have a clear financial plan. They have sound financial planning with clear objectives as compared to the segment who don’t opt to invest. Subsequently, this leads to greater financial security. Female investors also tend to be more confident about their financial future.
What kind of investments work better for women?
For women interested in investing, what type of instrument is most suitable? The bottom line is, all investment types work for women, gender aside. However, psychology dictates that women are less likely to be impulsive and take unnecessary risks.
It is in that vein that women might consider mutual funds or money market funds, where returns are stable and the process is similar to saving money regularly. In addition to that, these types of investments pose lower risks with long term benefits.
Equity and stock are also a place for women to invest their disposable income. Cryptocurrency has become a popular choice for women investors too, With the booming tech space, crypto is the new currency, and while there are risks, there are also high prospects of returns.
Lastly, gold investment. Gold is one of the most stable investments since it is less likely to be eroded by inflation. It’s a good inflation hedge and let’s be real, a woman can never have too much bling.
Not only are more women participating in the world of investing, but they’re also outperforming their male counterparts—combined with a growing trend of women making more risk-averse moves across their investment portfolios.
Now, more platforms are driven to make investing more accessible, including for women—enter digital financing platforms like Funding Societies. With user-friendly features like the Auto Invest bot, career-driven women can now invest at their convenience. Financial independence enables women to pursue an enriched life by achieving financial freedom.
Disclaimer: The information provided to you in this blog post is intended only for general information purposes only and does not constitute legal or other professional advice on any subject matter. The materials and the information provided are not intended to be and do not constitute an advertisement or solicitation. In no event will Funding Societies be liable to any party for any direct, indirect, incidental, special, consequential or punitive damages for use of such information by you or any unauthorized third party.