The female investor

Investment and portfolio building has traditionally been a male-dominated world, but these days more women are trading on the market – and they’re good at it!

According to an ASX Australian Investor Study completed in 2020[1], women make up 42% of Australian investors, yet 45% of those only began investing in the previous year.

Younger women, aged 18-25, known as Next Generation Investors, are starting to invest in stock portfolios. Typically, the goals for this cohort include saving for a holiday (50%) or paying down existing debt (34%).

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.
• Typically, while men are more accepting of market volatility (higher risk), women prefer stable or guaranteed investment returns (lower risk).

While we’re about breaking down stereotypes, the study found that women are generally more successful in their investments than men. This could be because women are cautious by nature, take longer to research investment choices, and prefer to ride out market ups and downs once settled. 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. Interestingly, support for Indigenous businesswomen is increasing as women’s investment networks strive to encourage women from diverse backgrounds. According to SmartCompany.com.au[2], female venture capitalists recognize 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. 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: with women saving an average of $598 per month compared with $839 for men.

To improve these figures, many women strive to secure their financial futures through self-education: magazines, blogs, podcasts, etc. Others seek professional advice through a 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 financial planning industry recognizes that more women are actively investing.

As professional financial planners, we can ensure all your decisions are well-informed and that your personal needs and goals are considered.

Women are proving themselves very capable investors, and we’re here to assist you in your path to a better financial future.

[1] www.asx.com.au Australian Investor Study – Investor Profiles (ASX Australian Investor Study 2020)

[2] www.smartcompany.com.au Analysis, Venture Capital (Stephanie Palmer-Derrien, March 2021)

[3] www.au.finance.yahoo.com How much the average Aussie your age has in savings (Lucy Dean, January 2021)

[4] www.finder.com.au Women rule at investing, so why don’t more of us do it? (Kylie Purcell, March 2020)