Investing for Women studies have shown for years that the investing habits between men and women differ greatly. Where men are usually more likely to take grand risks, women tend to be more conservative with their decisions. But perhaps that needs to change – there’s a reason that investments/investing of any kind is mostly dominated by men. Here we’ll give tips and reasons why investing for women can be a great and profitable venture.
Investing for Women
In a recent Fidelity study, 30% of women were more interested in preserving their wealth than higher returns, compared to just 20% of men. A lot of this has to do with confidence – women sometimes feel like they need to second guess themselves, leading to overthinking and regretting decisions they’ve made. If they overthink an investment too much, they’ll give up on it, and stick to playing it safe.
Another reason women are more conservative is fear – investing for women can be daunting and fear of losing the money they invest can be prevalent. But
there’s a way to allay these fears, and that’s to diversify.
The idea of diversification is to build a portfolio with an investment mix of real estate, stocks, bonds, and short-term/cash like investments. This is a great tip for investing
for women – these different investments don’t typically move in the same direction, meaning that while one could be losing money, the others could be gaining enough
money to off-set the negative.
Another reason women tend to be more conservative is that they’re not clear about the return on their investment, causing them to worry about potential mistakes and keeping a close eye on their assets. And this is another great tip for investing for women; while it’s good to check regularly, try to keep from checking too closely and too often. Keeping too close an eye can cause paranoia at every dip and loss, making the gains harder to see and causing ever more conservative moves in the future.
However women do have a distinct advantage when it comes to investing and that’s knowing when they should seek out a professional. 53% of women are more likely to seek out the advice of a professional and a mentor (compared to just 44% of men) and studies show that men tend to overestimate their own financial competence.
Seeking out a professional can ease any paranoia and help women understand exactly where their investments are going.
Another fear that women have keeping them from investing is the worry that they’re wasting money they could be using for their family. In this case, it’s a good idea to set clear financial goals, and try to stick to these parameters. This can include saving for retirement or the kid’s college fund, or maybe for a nice vacation.
Whatever the goal, make sure to see it through.
There are many reasons why investing for women can be daunting, but there are many more reasons why women should break free of their conservative mold.
As long as decisions are made with a clear head, there’s no reason why you shouldn’t end up with more gain than loss.