As the old saying goes, “You’ve come a long way, baby!” Women have been making fantastic strides in the past few decades. According to the U.S. Department of Labor, the percentage of women in the workforce has risen from 32 percent in 1960 to 47 percent in 2010. The increase in the number of working women places a premium on our time and changes the way we balance work, home, and financial matters. Sandwiched between caring for school-age children and aging parents, women still manage it all.
Women are transforming the economy on a daily basis, too. We are earning a greater number of advanced degrees and bringing home more money than we were 50 years ago. Men and women alike are focused on building a nest egg for the future. So we are ready to take charge of our investing, right?
Well, that depends on what you mean by investing and who you ask.
Traditionally, women’s roles within the home have included handling routine household finances. However, when pure investing is concerned, they are not always active individuals or partners.
In a 2009 survey by Scottrade, women were asked how they would rate their investing capabilities and 59 percent considered themselves beginners in investing. To contrast, a study the next year by GenSpring showed that 78 percent of men surveyed considered themselves to be very knowledgeable and confident in investment matters.
Perception does not appear to match the reality.
The Scottrade study compares men’s and women’s investment performance revealed that portfolio values are roughly the same for both genders. Said another way, there is no discernible gender gap in portfolio performance, rather women lack confidence — not competence — in investing.
Despite a new tendency to attribute women investors’ portfolio performance to a natural aversion to risk, there is nothing biological about investing! People tend to fear what they don’t know. If women feel confident, they will be equipped to better understand the risks and rewards of investments. Armed with knowledge, they may take more calculated risks.
But how do we go about building that confidence, so we know what risks may be acceptable?
Women can keep themselves informed by reading the latest investment articles online, in books or in newspapers. Understanding the current economy and investment trends can help you make more informed decisions. However, financial education for individuals is not traditionally offered in primary and secondary education. Colleges may prepare individuals to manage corporate cash flow and balance sheets, but rarely guide them on a personal level. Understandably, it may be difficult to know how to navigate the information if you are new to investing or if you have questions that you want answered.
If you live in or near a city, one good way to jumpstart your learning process may be to see if local universities offer continuing education programs. Most of these programs offer a range of in-depth financial and investment classes for you to choose. Classes tend to last six to eight weeks, and you get the chance to take a deeper dive into information that you want to know more about with experts in the field.
If you prefer a private tutorial, finding a financial advisor may be the way to go. Women in the GenSpring study who do have financial advisors have noted that they feel more confident about aspects of investing when they are comfortable asking questions and working closely with their advisor.
An important part of confidence in investing is making sure you are an active participant in the financial aspects of your life. Whether you make decisions independently or with a spouse, take time to gather information and ask questions, so that you can stay confident in your ability to invest. Taking the time to invest now goes a long way in helping you feel more secure about your future.
Deborah Stavis is a member of the DailyWorth Connect program. Read more about the program here.
Securities offered through FSC Securities Corporation, member FINRA/SIPC. Advisory and insurance services offered through Stavis & Cohen Financial, a registered investment advisor not affiliated with FSC Securities Corporation.
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Investing involves risk including the potential loss of principal. No investment strategy, including diversification, asset allocation and rebalancing, can guarantee a profit or protect against loss.