Women are investing more than ever, and with impressive results. Ladies, you are more financially savvy than you think!
Across the world, women are making progress in many important dimensions beyond motherhood and caretaking, with increased participation in the economy and leadership. In fact, women now control ⅓ of the world’s wealth , and here in Singapore, women are more financially independent than those of other countries. For the women who want to invest but hesitate to do so, you need to read this!
Female wealth is increasing rapidly in Asia
According to the WealthiHer 2021-22 report on women’s wealth, women are a growing force in Asia’s business scene. This is one of the factors that reflect the rapidly increasing female wealth in Asia (excluding Japan). A 2020 report by consultancy group BCG, also revealed that if the current annual growth rate of 10.4% continues, Asian women will add more than US$1 trillion per year to their total wealth over the next four years.
Through your work and investments, you could be part of this growing hub of wealth creation. Time to cast away the stereotype belief that men do the investing and women usually do the saving bit.
Women are better at investing than men
There have been numerous studies over the years that show that women are better at investing than men. In 2021, Fidelity published a study based on more than 5 million customers over the last 10 years with the findings that, on average, women outperformed their male counterparts by 40 basis points.
Simply put, when women invest, they earn a higher rate of return on their investments than men. The keyword here being when. Many women are hesitant to invest due to a lack of confidence. It’s actually not that difficult if you have access to the right tools and support. To begin, check out this easy guide on how to start investing in Singapore.
The reasons why women makes better investors
It is partly due to emotions. Contrary to the gender stereotyping of emotions, women are less emotional as investors and they tend to stay calmer than men in down markets. Studies show that women spend more time researching their investment choices and take on less risk, which attributes to better investing outcomes.
According to Terry Odean, a University of California professor who has studied stock picking by gender for more than two decades, overconfidence is one of the factors that differentiate the gender in their investment approaches, thereby affecting the portfolio’s performance. Men tend to trade more, which typically leads to more losses and additional transaction costs.
On the other hand, women prefer to participate in safer and less volatile investments with consistent track records – think dollar-cost averaging (DCA) – placing their focus on goals-based investing rather than just short-term performance. This long term investment strategy can help one to avoid timing the market and take the emotion out of investing.
Forbes advises to use system to invest like a woman
Now that we are aware of what works better when managing investments, it is possible to set guidelines to recreate the positive investing characteristics. In fact, Forbes advises people to use a system to invest like a woman. Think ‘slow, consistent and steady’.
For example, one may opt for automated investing using the dollar-cost averaging strategy where you consistently invest fixed amounts (i.e. S$100 per month). It pays to invest early, so even if you don’t have a lot of money – you can consider starting small, commit a sum that you’re comfortable with and stick to it.
Tiq Invest digital investment-linked plan (ILP) offers investment and life protection where one can start investing from just S$1,000, and the option to set regular top-ups with fixed frequency from S$100 per month. Learn more now
Singapore women, you are more financially independent
A recent Fidelity survey found that 59% of women in Singapore actively made investment and savings decisions, and they are ahead of women in other markets in terms of financial savviness. In fact, 58% of women here hold their finances in their own name, compared to 53% on average in other markets.
This suggests Singapore women were more likely to be more financially independent and proactive with their finances. That’s all great but there’s room for more women to gain greater financial literacy and start investing.
The earlier you start to invest, the more you can gain from compound interest because you will earn returns on the money you invest, as well as on returns at the end of every compounding period.
If you are thinking of investing or simply to take charge of your personal finances, good for you! Check out our easy guide specially created for women. While you’re at it, read this and this for further inspiration.
For those who are ready, you can start investing from just S$1,000 with Tiq Invest. Learn more
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