5 Things Women Should Know About Investing

Simply put, women lack confidence when it comes to investing.

Study after study consistently reveals that women take charge of buying decisions, budgeting and daily spending plans, but say they lack clarity about how to build wealth.

For 15 years, I’ve been working with affluent investors, both men and women, to build investment portfolios that help them achieve the things that are important to them.

In getting to know hundreds of households and the inner workings of their financial lives, I’ve found that women are far more likely to keep their savings in cash or low returning, relatively high risk bonds.

Many women struggle to even give themselves permission to have enough money to take care of themselves, let alone build wealth and financial freedom.

To inspire a new future for women, I’ve made a bold claim—that I’ll empower a million women to become millionaires. This might take me the rest of my life, but I’m empowered by knowing that if I can help women to build wealth through successful investing, I’ll have done something significant to level the financial playing field. Here are 5 things women should know about investing…

If money seems like a foreign language to you, here are 5 things I want you to know:

  1. You Can’t Learn Successful Investing From the Media

Financial reporters don’t work for you. Most of them have no formal financial education, and very few are focused on long-term growth and prudent planning.

Instead, they often use frightening messaging to scare you and keep you tuned in to their show.

  1. Men are not naturally better at investing.

This might challenge something you’ve always assumed to be true.

Multiple institutional studies have demonstrated that men don’t have a natural advantage when it comes to the study of math and the sciences, nor do they outperform women in investing when both genders are left to their own devices.

  1. Risk is Not a Bad Thing

Don’t hide out in bonds.

When it comes to investing, risk, appropriately taken, is associated with higher expected returns. When you take the long view in the market, prudent risk-taking combined with buy-and-hold investing can lead to significant returns.

  1. It’s Hard to Get Good Information

Ever wondered why you can’t learn how to invest in your 401(k) by watching a Youtube video (or the other myriad ways people learn on the internet these days)?

Actually, Big Brother “protects” you from that kind of learning. There are lots of restrictive rules governing what gets published about investing.

Financial advisors like me, who build investment portfolios for a living, are prohibited from offering investment advice to people who aren’t their clients.
We can only speak in generalities—so, of course, it’s nearly impossible to offer actionable advice.

  1. Most Successful Investors Get Help

There is a small cohort of DIYers who invest full-time for their own benefit and do well for themselves.

The Dalbar study of average investors, however, tells us that most people who invest on their own earn significantly lower returns than benchmark indexes, which is how we gauge investor success.

A good, fiduciary investment advisor can provide returns that compound over time, far outpacing any fees you’ll pay for the advice. A fiduciary advisor advertises as a “fee-only” advisor (distinct from “fee-based”), which means that advisor has an oath to put her clients’ interests first—even before her own.

She should be able to clearly articulate her investment philosophy, and teach you about it!