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Investment and portfolio building have traditionally been a male-dominated world, but these days more females are trading on the market – and they’re good at it! According to an ASX Australian Investor Study completed in 2020, women make up 42% of Australian investors, yet 45% of those only began investing in the year prior to 2020.
The Rise of Next Generation Investors
It’s intriguing that younger females – known as Next Generation Investors aged 18 – 25 – are taking up stock portfolios. Their goals include saving for a holiday (50%) or paying down existing debt (34%). This new wave of young female investors is reshaping the investment landscape with their unique goals and perspectives.
The ASX study highlighted a few other interesting points:
- Women prefer products more commonly understood, such as direct Australian shares (53%), residential investment property (37%), and term deposits (31%).
- Women are less concerned than men about low interest rates and market fluctuations but consider issues like whom to trust, hidden fees, and liquidity.
- While men are more accepting of market volatility, females prefer stable or guaranteed investment returns.
Success in Caution: Women’s Investment Strategies
While we’re about breaking down stereotypes, the study found that females are generally more successful in their investments than men. This could be because women are cautious by nature, taking longer to research investment choices and, once settled, preferring to ride out market ups and downs. Conversely, men tend to regularly review their portfolios and trade aggressively, buying and selling assets, potentially incurring additional fees and losses due to market swings.
In recent times, there has been a surge in Australian women backing other Australian women in start-up business ventures. According to SmartCompany.com.au, female venture capitalists are recognizing that entrepreneurial women face a specific set of challenges, such as a lack of networking and mentoring opportunities, and lingering perceptions around gender-based work/family roles. Further, support for Indigenous businesswomen is increasing as women’s investment networks strive to encourage females from diverse backgrounds.
Addressing Financial Inequality
Fact is, almost 40% of Australian women who are single for reasons of divorce, widowhood, or otherwise, will retire in poverty. Issues around the gender pay gap are recognized contributors to women generally having less money in savings and/or superannuation: females save an average of $598 per month compared with men $839. In an effort to improve these figures, many women strive to secure their financial futures through self-education: magazines, blogs, podcasts, etc. Others seek professional advice through referral from a trusted friend or relative.
A great place to start is your local library, where you’ll find financial books and magazines. Check out the ASX online Education centre, your local TAFE, or the government’s MoneySmart website for short investment courses and information.
The Role of Financial Advisers
The financial planning industry recognizes that more females are actively investing. This shift has prompted financial advisers to develop strategies specifically tailored to women’s unique needs and goals. These strategies often take into account factors such as career breaks for family care, longer life expectancy, and the gender pay gap, which can all impact a woman’s financial planning and investment strategy.
In fact, the industry is well-served by a large number of financial professionals who are women. These female financial advisers bring a unique perspective and understanding to the table, often relating more closely to the financial challenges and goals that women face. They can provide personalized advice that resonates with females investors, helping them to navigate the complexities of the financial world with confidence.
The Financial Planning Association of Australia (FPA) is a valuable resource for females looking to connect with qualified professional advisers. The FPA can put you in touch with advisers who are not only knowledgeable but also committed to understanding your personal financial situation and helping you achieve your goals. Whether you are looking to build a diversified investment portfolio, plan for retirement, or manage your wealth, a professional adviser can ensure that all your decisions are well-informed and aligned with your long-term objectives.
