How Women Should Approach Investing

Studies have shown repeatedly that one's attitudes and beliefs are a key determinant in their investing habits. Women often display a tendency to let others take financial decisions for them, and tend to be relatively more risk averse when compared to men. This can potentially impact returns eventually. Follow these simple guidelines, and you'll have created an edge for yourself when it comes to investing your money.

Be adaptable
Avoid being rigid in your beliefs about investing. Try to self-educate, and don't fall prey to risk aversion. Try to look beyond the obvious (traditional) investment avenues such as fixed deposits and life insurance, towards avenues such as mutual funds which could help you generate significantly higher returns from your investments eventually.

Participate in investment decisions
A study by DSP BlackRock Mutual fund revealed that "only 18 percent of single working women make their own investment decisions and 77 percent of the fairer sex depends on spouse or parents for their investment decisions". Aim to empower yourself to participate equally in investment decisions at worst, and take decisions independently at best! Women CEO's nowadays take investment decisions involving thousands of Crores - there's no reason you shouldn't be deciding where to invest your money.

Avoid speculative investments
There's a fine line separating 'high risk investing' and 'speculating'. Speculative instruments include derivatives trading, commodities trading, day trading, short term trading in stocks and the likes. Eventually, you're more likely to lose money by speculating, as your decisions will largely be driven by panic or the lure of short term gains. Avoid speculating altogether.

Don't lose track
Commit to being a good record keeper. It's a common practice to pile on investment upon investment, only to completely lose track of where your money is. Get your papers together and put things in order. You might just end up weeding out a lot of worthless investments as a side benefit.

Diversify
The adage "don't put all your eggs in one basket" applies to all investors and to women, in particular. Over the years, we've observed numerous women investors who've built an appetite for only one or two specific types of investments (such as fixed deposits, life insurance or real estate) and thus, often end up exposed to risks that are specific to one asset class. This tendency may be derived from past conditioning (from their father or any other close family members), or simply from the disinclination to consider other avenues. Break out of the mould and diversify!

Set clear goals… and commit to them
Have you decided what you want to do with your money? Would you like to purchase an asset, plan a vacation, save for your retirement, or fulfil some other goal? Creating a clear goal plan and committing to it is key.