Have you ever sat down, listened and paid attention to the differences that men and women have when talking about their investments?
Years ago, I read an article that really stuck with me. It was titled something like "The Best Investor in my Family is my 83 year old Grandmother." It shed light on the reality that there can be very stark differences in the way we invest. The reality is that women that I've encountered, do seem to invest differently than men....for better and for worse.
How, you ask?
1. Men (yes this is generalizing!) tend to time the market, and some even enjoy being stock pickers. While I've known some women who enjoy this as well, by and large, women tend to be less interested in being that active, and more interested fix-it-and-forget-it options that they need to review less frequently. They are likely to also be more patient with market cycles. There's a pat on the back for you ladies!
2. Women tend to hold higher amounts of cash or conservative types of investments. This part is not always good. As I mentioned in my last blog post, women tend to work less hours over their lifetime and as a result often times have less savings accumulated to begin with. Couple that with money that is making very low yields and the math will tell you, we fall even farther behind.
My Suggestion: Sit down and decide what you actually need in an emergency fund, and invest the rest. It doesn't need to be a high risk investment but it should be something that will get you an expected annual return above zero so it can help you accumulate more over your lifetime.
3. This one may actually lead back to item 2. Investing can get complicated. I've encountered a number of women who have gotten so overwhelmed by it all that they've ended up doing nothing. We can all do a little better than nothing, and doing nothing can result in a. getting nothing or b. losing something...and we'd all like to avoid ending up there.
My suggestion: Start small. I recently read a book called The Money Queen's Guide: For Women Who Want to Build Wealth and Banish Fear. It's a short read and I believe would do a great job getting a woman (at any age) started on her road to learning what to do with her money.