Women are breaking the glass ceiling at work and redefining and reinventing themselves steadily. The world of investment, which was earlier an exclusively male domain, is presently seeing the presence of more and more women every day.
I regularly see an impressive number of women asking for financial advice on business channels to improve their portfolios.
Experts have always discussed at length the skills women show in managing the monthly household budget with available resources. Today, women are earning a livelihood,
managing home finances, and investing for profitable returns. All this necessitates an introspection into how women can prepare themselves before investing.
Ten simple ways that will make women confident investors
- Develop confidence: As women, we have been expert multitaskers —successfully managing our professional and personal lives. When it comes to investments, it is all about developing a learning curve to manage our investments. Just as we patiently take care of each family member, we must also show patience when it comes to learning about finance and investment. No one becomes an expert investor overnight, but there are several ways to acquire financial knowledge. For instance, many financial experts share advice on various social media platforms. BSE and NSE also offer courses on investing. We could benefit from these and improve our investment skills.
- Don’t let fear keep you from investing: Accept the fact. Investments come with risks. But we must not let the fear of losing our capital stop us from investing. We can start by investing small amounts. We may lose small amounts initially, which should be okay. We may never learn unless we dip our toes into the world of investments. Learning will happen gradually. It is important to remember that investing does not mean making a profit every day.
- Estimate various household budget components: Many women make and manage the household budget. This makes it easy to create a separate pool of savings. For instance, we can put aside 20% amount every month towards investments or an emergency fund. This will create a steady stream of cash flows into the investment pool. We can also economize on certain purchases. This will add more money to the pool.
- Understand the goals: It is essential to have both short-term and long-term investment goals. We may create targeted savings towards specific goals or exhaust our savings for achieving a particular goal. Whatever the case, saving money must be a continuous process. It will help us with our retirement plans. It could finance our dream vacation house. It could help us remain independent even after retirement. We must also understand our risk profile. Some of us are conservative, and others are more aggressive in our risk orientation. It is very important to factor in this while making our investments.
- Know about the various investment options: Always know about the different baskets of assets and how they behave in different market conditions. We must remember that diversification is essential. We should allocate money among different asset baskets, such as equities, bonds, digital gold, and real estate. Certain investments may have a low correlation with other investments. During stressful market conditions, investments may move in opposite directions. It is not advisable to concentrate all investments in a single security or industry sector when investing in the stock market. Diversification helps to reduce our portfolio risk. The best thing to do is to consult a financial advisor for this purpose who can help us make better investment decisions.
- Don’t give in to fear of missing out: As novice traders, we may act in haste by following the herd and buying our investments at peak prices. It is better to have a systematic investment plan (SIP) and invest in small amounts consistently. This will ensure that our investment portfolio’s average cost is lower. Also, it is a given to be prepared for any adverse turns the market takes. Remember, equities are long-term investments where we realize the maximum return by staying invested.
- Understand the return-risk profile of assets: We need to understand how different assets behave in different market conditions. Each asset has an associated risk. We may get attracted by the high returns, but we must understand the high risk associated with each asset.
- Continue the process of educating yourselves: The easiest way to improve how we invest is to continue to learn. Educating ourselves on the current investment trends and emerging financial conditions will broaden our knowledge and give us more financial freedom.
- Allow yourself some self-care: Women spend so much time tending to other people’s needs that they hardly think about investing in self-care. I am so busy with my day in the kitchen, deadlines at work, and commitments to my family members that I am left with almost zero desire for ‘me time’. However, I have learned the hard way that, as women, we should devote time to ourselves. We can go to the gym, go for a walk, listen to music or even enroll in a course that could sharpen our investment skills.
- Take charge of the portfolio: We may have seen the men in the family controlling and managing the financial affairs. However, this is slowly changing, and women are stepping ahead and asking for opportunities to manage their finances and home budgets entirely. It is important to change the narrative—sit with your family and openly discuss financial literacy with your children and other family members. If you know that you manage household finance well, then be upfront and ask that financial management be entrusted to you completely. A little step in the direction of independence will go a long way in taking charge of your investment portfolio in the future.
Financial freedom is a gift every woman should give herself. Whether you are a homemaker or a working professional, learning the dos and don’ts of investment is your right. We hope our tips help you embark on a successful journey to manage your personal finance and achieve financial freedom effectively.
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