The Female Investor
In recent years, an increasing number of women have been retiring in poverty. However, this trend may be about to change as more women are becoming investors and building their own portfolios. In contrast to men, women tend to approach investing differently, which may lead to better outcomes for their retirement savings. This article will discuss the rise of female investors and the differences in their investing strategies compared to men.
The female investors
Traditionally, investment and portfolio building has been a male-dominated field, but in recent years, more and more women have been entering the market and are proving to be successful investors.
In 2020, the ASX Australian Investor Study found that 42% of investors in Australia were women, with 45% of those women starting their investing journey within the previous year.
Next Generation Investors, typically aged 18-25, are beginning to invest in stock portfolios. Their main goals for investing include saving for a vacation (50%) or reducing existing debt (34%).
The ASX report showed that:
- Women tend to favour more straightforward investment options, such as Australian stocks (53%), residential property (37%), and term deposits (31%).
- Women are less worried about low interest rates and market fluctuations, but do consider factors like trustworthiness, hidden fees, and liquidity.
- Typically, men are more willing to take on risky investments (higher risk), while women prefer steady or guaranteed returns (lower risk).
The study found that female investors are typically more successful than men in their investments, which may be because women tend to be more cautious, take longer to research their options, and are willing to ride out market fluctuations. In contrast, men often review their portfolios and trade aggressively, leading to potential additional fees and losses from market movements.
Recently, there has been a growing trend of Australian women supporting other Australian women in start-up ventures. Interestingly, support for Indigenous businesswomen is on the rise as women’s investment networks aim to promote diversity.
According to SmartCompany.com.au, female venture capitalists are aware that entrepreneurial women often face challenges such as limited networking and mentoring opportunities and stereotypes regarding gender roles. In fact, almost 40% of single Australian women who are divorced, widowed, or otherwise will retire in poverty. The gender pay gap is known to be a factor in women having less money saved and/or in their superannuation: women save an average of $598 per month, compared to $839 for men.
To improve their financial standing, many women investors turn to self-education through sources such as magazines, blogs, and podcasts. Some also seek guidance from professionals recommended by friends or family.
A helpful starting point is your local library, where you can find financial literature and publications. Additionally, consider checking out the ASX online education centre, your local TAFE, or the government’s MoneySmart website for short investment courses and resources.
The financial planning industry acknowledges the growing number of women who are taking a proactive approach to investing.
As experienced financial planners, we can provide you with the guidance and support you need to make well-informed decisions that align with your personal goals and needs.
Women are increasingly demonstrating their capabilities as investors, and we are here to help you achieve your financial goals.
