While women tend to let their spouses or male family members take the long-term financial decisions, they outperform men when they are empowered to start investing.
The biggest hurdle women face when investing is the knowledge gap, where close to 90 percent of women “step aside when it comes in long-term financial decisions because they think their spouse, or male members of their family, know more about the topic than them,” said Nandini Joshi, COO of StashAway, an investment platform founded in Singapore.
“They therefore completely refrain from investing because they feel they don’t know and then there is a fear of losing money because they don’t have the right knowledge. If they are single, they tend to hoard a large amount in cash or rely on a male member of the family for any long-term investment decisions,” she continued.
Currently, there are 30 percent women investors on StashAway MENA’s platform, a figure Joshi is satisfied with given the platform’s regional launch was in 2020 – but that she hopes to see grow further.
However Joshi points out that women tend to have a solid sense of finances as is evident by them typically taking the leading when it comes to budgeting and saving.
“We know that women are very much involved in budgeting decisions and managing of the day-to-day cash flow. Women save better than men because they are far more tuned into the budgeting but they tend to not step into what happens with those savings later on or keep it largely in cash,” said Joshi.
“So what we are trying to highlight, through She Invests, is that women could know more about it and there is a very easy way for them to learn. Bridging the knowledge gap for them has been our chief focus,” she added.
She Invests by StashAway is a series of personal finance sessions curated for women which covers topics such as digital assets and thematic investments.
When they do invest, women tend to outperform men in performance of investments, said Joshi.
“This is because women tend to assess their risk profile better than men which keeps them invested through market volatilities. Over a 15-year period, markets will end up positive and higher than where you started, and so staying invested over that time period is one of the best ways to ensure that you come up with the best risk-return profile at the end of your long-term time period,” said Joshi.
“Because women assess their risk profile better, they stay invested through the market volatilities and therefore end up outperforming men,” she added.
Investment tips for women
Joshi offers the following advice for women who have decided to take the first step into investing.
Your first $100 is your most valuable investment as a kick-off: In the long term, it is not just about the compounding of the actual $100, but also the way it pulls you to the knowledge of investing. Because you have put that $100, you will look at its asset allocation and you will do your own research. You are therefore compounding not only on the money but on the knowledge.
Make sure you look at fees: Look at how the fees are charged; if you don’t understand it fully transparently there is something wrong so dig deeper into it.
It should be personalised to you: Whether you go with a platform or a financial advisor, if they are not talking about your needs first and instead are going directly into the product you should go into, it is not the place to be. It is important that your money is put towards your personal goals and not the sales goals of somebody else.
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