Are women afraid of investing?

Current stock market turublent year became a forced but beneficial break from investing for me. I love summertime when one has time to read, study and think. One of the topics, which is very loud these days, is “Women and investing”. Typically you can read a lot about women not investing as much, not just in the Czech republic but elsewhere in the world. Today’s blog reflects on why this topic might be a reality.

Plenty of interests and even more hurdles

I have a lot of personal experiences with the following: whenever I tell another woman that I actively trade stocks, most of them show an active interest in it. They ask many questions – what am I buying or how much time do I spend by trading? Then, pretty much all of them sigh and talk about the need and interest in investing their money somehow, but… It’s a topic many women are dealing with, but it almost seems that an invisible force prevents most of them from doing the most crucial step – simply begin.

Where is the problem?

I often thought about the problem, not just me, but many others as well. And I think the problem is not the lack of education, knowledge or time. Instead, I believe women are overwhelmed with prejudices that discourage them from investing. During the last ten years, when I have been actively investing in stocks, I have experienced more than enough situations women have to deal with while investing. So let’s look at what can discourage women from investing – I named this list “The top prejudices discouraging women from investing” because I am confident those are indeed just prejudices we can overcome. Suppose you give yourself a point for every prejudice on this list that you find fitting. In that case, I bet especially very successful, educated women who are professionals in their respective fields would have the top score on the prejudice list.

The top prejudices discouraging women from investing

Self-confidence or “I need perfect knowledge or even better – a diploma from finances to actively and successfully invest”.

I bet that for most women with full-time jobs or businesses in a different field than finances, this seems like a hurdle that is unbeatable. In their daily routines, most women can’t study finances and markets on top of everything. Education in finances can be an advantage but investing is possible without it. After all, we have not studied universities to raise children either, so that we can handle this without it as well.

The need to be perfect and avoid mistakes

Most professions (doctors, lawyers, accountants, tax advisors and others) are undeniably based on the principle that mistakes can mean and cause considerable complications. It can often mean financial loss, litigation, and problem with clients, and in the case of doctors, it can have fatal consequences. As women, we usually try to be perfect at our jobs, be perfect moms, have a perfectly organised home, and be good wives and partners. It’s also good to look stylish while doing it and care for ourselves. And if we are not perfect, we often feel a sense of guilt and often punish ourselves for it. But this approach doesn’t work when it comes to markets and investing in general. Markets are irrational, and you will make mistakes. But we can learn through mistakes and gain valuable experience. I often feel like a boxer when he got a brutal knockout, but after taking a step back, I realised those are important lessons, even though they can sometimes be very painful. I admit that there are many less painful ways on the way of investing… What’s critical is acknowledging that you don’t have to be perfect on the market, and it’s not necessary to be flawless. What’s important is to make money.

The need to have every situation under control

This is another stigma which we often carry due to multitasking which is an inevitable part of many women’s daily lives. We need to control our work/business, employees, kids and their schedule, and household, to name a few. Without control or a system, some aspects of our lives would collapse; at least, they would come in mine. This is another aspect that plays against women when investing. No one can control the market, the market does whatever it wants. The more control you want, the more frustration you’ll create for yourself. The best thing to do is to let the market flow; the moment you accept this, you will feel much better. And there will be plenty of control left after that.

“I don’t have time.“

This is a comment I hear often, and I completely understand it. In a busy schedule, there isn’t any time for “nice to have” things like investments. Women often think that investing needs a lot of time, but in my opinion, it aligns with everything I mentioned above. Of course, you can spend plenty of hours per day on the market, but you don’t have to. It all depends on a person’s investment style and expectations about profits. If you spend by investing and control of your portfolio just a few hours a month because you don’t have more time, it’s clear you won’t be able to beat the market. But even a short amount of time (even an hour per month) is enough to be good investor…and to be honest, less can often be more. Checking the market once a month can save you a lot of nerves you would get if you see the markets’ ups and downs daily.

Relationship to money

Generally, the relationship to money is a big topic, not just among women. Many economically active women grew up during the communist period, where just a few things were available. Many women (often single mothers) have deeply rooted harmful money-related boycotting programs in their minds. Most women manage ordinary family budgets for shopping, holidays, and other regular household items. Many women don’t know any models from their own families, where a woman would make investment decisions. Those decisions are typically the male domain. It demands self-reflection and honesty to bring the root of these programmes to the light. People often find out that their minds carry many things which may not be very beneficial for them. The only thing that can help is to realise all those negative programes because after that, it’s much easier to start finding solutions.

Women are brilliant investors, and we have the data!!!

To support all the women about the fact that investing is unequivocally a field with enough space for them, we can look at the countless studies showing that women are better investors than men. To name all the reasons, we’d have to do another blog. Maybe next time.

Conclusion

The article’s conclusion is clear – all the prejudices I mentioned above exist only in our minds. If you think you need to start doing something before inflation eats up all your savings, it’s good to realise that those looking for a way will find it. The only limitations are those which exist in our minds. Marika Čupa