With the Indian stock market displaying new highs as an ordinary phenomenon, retail investors seem to be allured by such a bullish wave. The fundamental factors and India’s growth story have fueled robust returns in the market. The benchmark indices, Nifty and Sensex, clocked more than an 18 per cent return in 2023, outperforming other asset classes such as fixed deposits, bonds, real estate, etc.
Furthermore, demat accounts in India soared to 14.39 crore in February from 3.94 crore in December. Besides, the National Stock Exchange (NSE) informed that its unique registered investors have surpassed the nine crore mark in February. Notably, one crore users were added in just five months.
The pandemic wave was overtaken by a bullish wave after the enthusiastic participation of retail investors. Moreover, the penetration of demat accounts has reached 99 per cent of pin codes in India. With such inclusivity, women’s participation is pivotal in ensuring financial inclusion and an even spread of market gains.
“Women's participation in demat accounts has been witnessing strong growth, especially after the pandemic. The share of demat accounts held by women is approaching 25 per cent, a significant increase from around 20 per cent since March 2022. This indicates growing interest among women in the stock market and investments, contributing positively to their financial empowerment and the broader investment landscape,” said Jennifer Robble, Chief Operating Officer (COO), Hedonova.
According to the Association of Mutual Funds in India (AMFI), women make up one of the fastest-growing segments regarding mutual fund participation and the financial market. This reflects an increased desire for growth and aspiration among women investors.
“To ensure decent returns on their investment journey, women can consider various options tailored to their financial goals and risk tolerance. Diversified mutual funds offer professional management and diversification, making them suitable for different investment objectives. Equity-Linked Savings Schemes (ELSS) provide tax benefits along with the potential for capital appreciation, while Fixed Deposits (FDs) offer stability and the National Pension System (NPS) aids in building retirement savings,” said Sonam Srivastava, Founder and Fund Manager, Wright Research.
Notably, given the significant gender disparity in the workforce, with only 39 million women employed compared to approximately 361 million men in India.
“Women must opt for diversifying decent returns and growing their portfolios. Those looking for some stability in their portfolio coupled with tax benefits should explore PPF, investment-based insurance plans, and fixed deposits. And those more in control of their risk profile can consider investing in physical gold or gold-oriented investment options and real estate to achieve high yields and inflation-adjusted returns in the long term,” said VLA Ambala, SMT Today.
Recommending stock market investing, Ambala said to start with small resources and focus more on learning. This will help execute investment strategies accurately and help in growth. Always start with quality stocks and mutual funds and invest as much as possible. Lastly, you should never shy away from seeking the assistance of a mentor or professional if you feel you need better guidance to navigate the stock market with confidence.
Poonam Tandon, Chief Investment Officer (CIO), IndiaFirst Life Insurance, highlighted women’s constraints as investors, “Women generally tend to have a mental block when it comes to investing their own money and generally tend to outsource the same to a relative or a spouse and blindly sign the documents. However, one must have full control of one's own money and if they understand the concept and take correct advice, they can do the same by themselves.”
Tandon urged to create financial awareness at the high school or college level and encourage women to make financial decisions themselves to gain confidence.
‘I believe that increasing awareness about stock market investing can be achieved through tailored financial literacy programs and workshops for women. Similarly, collaboration with new-age financial institutions, sharing insights into the journey of successful female investors, and providing mentorship opportunities would be crucial. However, at the foundational level, introducing thorough financial education in schools and colleges, and community outreach programs can instil basic financial and investment management knowledge,’ said Ambala.
Robble also emphasised the role of women in wealth creation and said they face constraints such as lower financial literacy, societal conditioning, and lack of time due to caregiving responsibilities. Overcoming these challenges involves enhancing financial education, leveraging online platforms for learning about investments, and starting with low-risk investments to build confidence.
As the Indian stock market and India’s growth story paint a promising picture, the opportunity to seize the gains is not a bygone phenomenon. As a Chinese proverb says, ‘The best time to plant a tree was 20 years ago. The second best time is now.’ The compounded annual growth rate (CAGR) is imperative while investing since it determines significant gains, as a biological study suggests women live longer than men with a global life expectancy of 73 years compared to 68 in men is categorically a leverage.