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 about women’s guide to investing!
Increasing trend of women investing
Now more women are getting involved or developing interests in investing. There are so many untapped opportunities for them in the investment world. A study about women and investing reported by Fidelity shows that in the US, 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
Still from the same report, it is known that 50% of women have been more interested 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 indicates that their customers (more than 5 million users) over the last ten years find that women on average beat their male counterparts by 40 basis points or 0.4%.
More women acted quickly to prepare for the uncertainty
According to a survey about women and investing from JP Morgan, it’s more natural for women to be savers than investors. From 4,000 women across 10 European countries, only 18% invest regularly.
This is actually a good sign. It means women are well prepared to face uncertainties. However, they need to diversify 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.
From a JP Morgan study, it’s known that 78% of women who invest also have a clear financial plan. Their planning is filled with clear objectives compared to the non-investors group. This plan leads to greater financial security. Female investors also tend to be more confident about their financial future than those who choose only to save their money.
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 bias 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 options are also a great place for women to invest their disposable income, these investment modules are stable and with minimal risk, can earn significant returns. For women who like a quick and easy option, crypto wallets have become a popular choice. It’s easy to use and security is high. The tech space is booming now and crypto is the new currency, while there is risk, with the fluctuating returns. Your cash is always accessible and all you need is an app.
Lastly, gold investments. 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, you 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.
More fintech platforms are driven to make investing more accessible, including for women—enter digital financing like Funding Societies. With user-friendly features like Auto Invest, now career-driven women can invest at their convenience. Financial independence enables women to pursue an enriched life by achieving financial freedom.
Plan to diversify your investment portfolio? Click here to start your investment with Funding Societies Malaysia.
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