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Investing
IWD
It’s official: women are better investors than men. They just don’t think they are. In fact, a 2017 study from Fidelity Investments1 shows that just 9 per cent of women believed that statement. But that same study also analysed returns on investments by both men and women – and found that the women earned 0.4 per cent higher on their investments than the men. That figure might look small but it represents a whole lot of added value over time.
That study isn’t the only one, either. There’s a whole body of research2 which shows that women tend to make better financial decisions around investing. They’re more objective, they are less impulsive and they hold more diverse portfolios. As Fidelity’s senior vice president of women investors Alexandra Taussig said: “Women need to lean in and own the fact that they’re better investors and celebrate that.”
Bust the myths
So why don’t women celebrate our financial abilities more? Sadly, it’s hardly surprising that womens’ confidence is taking a while to grow. After all, as recently as the 1970s, many were routinely refused3 mortgages, loans, and credit cards.
Consequently, a disempowering myth grew up that women couldn’t manage money. A study by Merrill Lynch and Age Wave4 found that just 52% of women say they feel confident managing their investments, compared to 68% of men. Yet over a third of women in that study said they wished they had invested more of their money.
Be the change you want to see
But there’s good news: it’s the 21st century and the male-dominated world of investing is changing fast – and changing for the better. Last year, for example, saw the biggest-ever rise in the percentage of female fund managers. The number of mixed-gender portfolio management teams has doubled over the last six years – and these teams perform best in all markets on risk return. As the Citywire Alpha Female report5 points out, that shatters the myth that women prefer not to take risks in investing.
Women’s increased visibility in the professional fund management space matters, because it’s helping to boost confidence among women who want to manage their own investments.
And those investments are now more accessible than ever.
There’s still a way to go, but the investment landscape is finally changing to cater more for female investors. Tech is democratising investment strategies, information and processes: the dusty office and disapproving bank manager have long been consigned to history.
“It’s time to take control of your finances and realise just how much power you have in the investment space.”
Make a difference
Financial products are changing too, as the world changes and investor priorities change with it. Evidence shows that women are more likely to seek out sustainable investing. They care more about where their money goes, and they want to see that it’s making a real difference. As a recent RBC Wealth Management6 study of its US clients commented: “Female clients… are more likely to prioritise environmental, social and governance (ESG) impact when considering what companies or funds to invest in, while male clients are much more likely to prioritise financial performance.”
Just do it
And you no longer need hundreds of thousands to make investing worth it. In the 21st century, it’s for everybody, no matter how much money you have. So, if you’ve been considering taking your first steps into investment, it’s a great time to join the millions of women who are already doing it. It’s time to take control of your finances and realise just how much power you have in the investment space. After all, your financial decisions could literally change the world.
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ONLINE PENSION SCAMS ARE ON THE RISE.
More than two thirds of savers believe that they would be able to spot a pension scam if they saw one.
Starting your own business: mistakes to avoid
Starting the journey as a business owner can be an exciting and rewarding experience, however, it is important to avoid money management mistakes and learn how to take calculated risks that will benefit your company. With a sizable number of new businesses failing within their first year, it’s important to learn from past entrepreneurs’ mistakes to avoid them yourself in the future.
The mystery of the missing pensions
It’s been widely reported that millions of people have lost track of their workplace pensions as people change jobs and move house so often.
Pension Drawdown Explained
If you need regular income throughout your retirement, pension drawdown could provide this by using your own pension pot. Is this the answer for your retirement needs?
Changing priorities for pensions
Over the years there have been many recommendations on the best route to take for your pension with a common perception that everyone should start young, to benefit from compound interest. The Institute for Fiscal Studies (IFS) may have changed this thought process. In a recent survey the IFS has called the government to nudge people to save more into pensions once their children have left home.
T:ONE 210504 – MAY NEWSLETTER – The New Tax Year
Once again, we find ourselves at the beginning of a new tax year. With everything that has been going on this last year, it is perhaps unsurprising if it has passed you by.
Investing for all
With just a couple of weeks to go until the tax year ends, many investors will be finalising their plans to use up their 2020/21 allowances, including the annual £20,000 ISA allowance.
Are better days ahead?
Never has the need to search for light seemed stronger than it has in the past year. Unexpectedly, the world as we knew it plunged into disarray; everyday news was filled with economic markets crashes, business collapses and society as we know it, has become a distant memory. It feels we have been living a through a time of great upheaval.
