Women and Investing: “Must Know” for Women on Budgeting, Finance and Investing

The current status of women in investing is not great. While 25% of Demat accounts in India are owned by women, most of them are run by the men in their lives.

A recent survey by LXME showed that only 7% of women make independent investment decisions. They do not participate enough in the decision-making process.

Kanika Agarrwal, co-founder of Upside AI, says, “It’s unfortunate because studies show that women are better investors by temperament. They do more research, hold on longer, and follow a systematic investment plan. All of these are on the best practice checklist for a good investor. Women also trade less than men, helping to improve returns even by simply reducing transaction costs. »

Stereotypes and Concerns About Women’s Financial Literacy

According to Agarrwal, it is a problem of stereotypes for men and women. “In a patriarchal society like ours, money decisions are often made by the men in the family. Conversely, more women find discussions about money, investments and finances daunting and intimidating,” she points out.

As noted above, women may even be better savers than men, but do not participate sufficiently in investing.

‘Must Know’ for Women on Budgeting, Finance and Investing

  • In the words of Buffett, “Investing is simple but not easy.” Given the proliferation of apps today, says Agarrwal, “starting your investment journey has become very easy, you can set up mutual fund SIPs with just a few clicks.”
  • Experts say you can start small and potentially save 6 months of expenses as cash for emergencies.
  • Invest regularly and don’t buy products if you don’t understand them.
  • Don’t be solely dependent on employee health coverage. Industry experts say that one should purchase both term and health insurance as well as for one’s family.
  • Starting to invest is asset allocation. Agarrwal explains, “One has to look at his finances and depending on the risk one wants to take, he/she has to split 100% into at least 3 basic asset classes like stocks, debt and gold. ”
  • With equity, says Agarrwal, “One can pick a NIFTY ETF, a few mid and small cap funds, an international fund (when it reopens) and start a SIP and invest monthly.”
  • With debt, on the other hand, she suggests, “short-term money can stay in fixed deposits, cash, and long-term. One can even choose conservative money market funds that invest in RBI-backed government bonds.
  • In gold, according to experts, you can buy gold ETFs or gold sovereign bonds with an 8-year lock-up period.
  • Once a year, according to Agarrwal, check to see if the asset allocation has changed because your asset prices have moved, then rebalance it to reset it to your predetermined allocation.
  • Above all, remember that it is never too late to start investing. “Most of the money is made through the compounding of returns and so starting today is better than tomorrow,” concludes Agarrwal.

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