Women and investing: ‘Must know’ for women about budgeting, finance, and investing

In a patriarchal society like ours, money decisions are often made by the men of the family. Conversely, more women find discussions around money, investing and finances intimidating and daunting.

mutual fund, mutual fund investment, MF, equity markets, diy investment, diy, do it yourself, equity mutual funds, Large-Cap funds, ICICI Prudential Bluechip Fund, Mirae Asset Emerging Bluechip Fund, PGIM Midcap Opportunities Fund, Nifty, Quant Active and Small-cap Fund,, health insurance, health insurance needs, Omicron wave, Domiciliary treatment expenses, low waiting period, Consumables cover, super top-ups
Women also trade less than men which helps improve returns even by simply reducing transaction costs.

The current status of women in investing is not great. While 25 per cent of Demat accounts in India are owned by women, a bulk of them are operated by the men in their lives. 

There was a recent survey done by LXME which showed that only 7 per cent of women are making independent investing decisions. They are not participating in the decision making process enough. 

Kanika Agarrwal, Co-founder, of Upside AI says, “This is unfortunate because studies show that women are temperamentally better investors. They do more research, hold for longer and follow a systematic plan to invest. All of these are on the checklist of best practices for a good investor. Women also trade less than men which helps improve returns even by simply reducing transaction costs.”

Stereotypes and concerns around the financial literacy of women

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

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

‘Must know’ for women about budgeting, finance, and investing

  • In the words of Buffett, “Investing is simple but not easy.”  Given the proliferation of apps today, Agarrwal explains, “starting one’s investing journey has become very simple where you can set up mutual fund SIPs with the click of a few buttons.”
  • Experts say one can start small and eventually keep 6 months of expenses as liquidity for emergencies.
  • Invest regularly and don’t buy products if you don’t understand them.
  • Do not be dependent on employee health cover alone. Industry experts say one should get both term and health insurance as well as for their family.  
  • Start investing is asset allocation. Agarrwal explains, “One should look at their finances and based on how much risk one wants to take, he/she should split 100 per cent into at least 3 basic asset classes like equity, debt, and gold.” 
  • With equity, Agarrwal says, “One can pick a NIFTY ETF, couple of mid and small-cap funds, an international fund (when it opens up again) and start a SIP and invest monthly.”
  • With debt, on the other hand, she suggests, “short term money can sit in fixed deposits, liquid funds and long term. One can pick even conservative MFs that invest in government bonds backed by the RBI.”
  • In gold, according to experts suggest, you can buy gold ETFs or sovereign gold bonds which come with an 8-year lock-in period.
  • Once a year, according to Agarrwal, check if the asset allocation has changed because the prices of your assets moved and then rebalance to reset it to your pre-decided allocation. 
  • Most importantly, remember that it’s never too late to start investing. “Most money is made through the compounding of returns and therefore starting today is better than tomorrow,” concludes Agarrwal.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

Most Read In Money
Photos