Women and Investing: They Don't Seem to Get On. Here's How We Change That
- Written by Jack Liang, Vice President of Tiger Brokers Australia
Women are making strides in the investment world, often outshining their male counterparts with impressive performance and success. Despite this, the number of women investors still lags behind men, with only 33% of women actually seeing themselves as investors, according to research from Fidelity.
Insights gained on Tiger Brokers trading platform paint a similar picture: less than one in three investors are women. Lack of financial education, gender pay gap and caregiving responsibility are often the factors preventing women from investing. But with access to financial information at our fingertips in the modern world, it’s not impossible for busy mums and money-conscious women to carve out a small amount of time to start investing.
If a little encouragement helps, do you know that women, in fact, tend to be better investors than men? Research from Fidelity Investments shows that women investors tend to achieve positive returns and outperform men by 40 basis points, based on an analysis of annual performance for 5.2 million accounts. We also see a similar trend on our platform where female investors, despite being less active (23% fewer transactions on a monthly basis) in trading, seem to be making more strategic and profitable choices as they have greater objectivity in investing than male investors.
So for those who’ve yet started their investment journey, it’s never too late to do it now. Below are some tips for aspiring female investors to consider. Remember, overcoming self-doubt and your fear of investing is halfway to success.
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Arm yourself with the investment basics: Investing is often seen as an intimidating concept, but it can be very straightforward if you’re armed with the right tools. Educating yourself about the economy, interest rates, exchange rates and government policy is the first step, and there are plenty of online resources such as MoneySmart and Motley Fool as great starting points.
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Understand Your Risk Tolerance: Assess your risk profile using available tools. Knowing your comfort level with risk helps you make informed decisions aligned with your financial goals. If you have a lower risk profile, it’s best to opt for government bonds, high-quality corporate bonds or Certificates of Deposit (CDs), while higher risk profile investments include individual stocks, Foreign Exchange (FX) trading or cryptocurrencies.
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Find the Right Investment Vehicles: Aside from matching your investment choices with your risk profile. Diversification is key. Diversify your portfolio to match your risk tolerance. A balanced mix of stocks, bonds, mutual funds, and other financial instruments can mitigate risk and enhance returns.
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Start Small but Stay Consistent: Compared to male investors, women tend to hold too much cash on the sidelines and often feel they need to know more before they invest. On Tiger Brokers’ trading platform, female investors have a 29% higher account balance compared to their male counterparts, suggesting their cautious attitude toward active investing. Consider beginning with modest investments and gradually increasing them as you gain confidence. Consistency is crucial in building a successful investment portfolio.
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Know When to Sell: For every investor, knowing when to sell shares is a critical part of success. Investors need to consider several factors before buying or selling an investment, including how much risk they're willing to take and when they'll need the money. You might want to sell your stocks to adjust your portfolio, free up money or shift in market performance.
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Leverage Technology: Leveraging technology can give you an edge in making data-driven decisions. A great place to start is using trading technologies such as digital brokers and AI tools like TigerGPT that are useful for insights, analyses and market updates. Since launching, the AI tool has seen over 400k conversations, nearly 70k engaged users and more than 10k weekly chats.
Jack Liang, Vice President of Tiger Brokers Australia
