Women seem to be disadvantaged in almost every industry — except when it comes to investing. The stock market, nor any other financial market, doesn’t care what your gender is. It pays the same amount regardless. Here’s how to get your fair share.
Unlike men, you are smart enough to pull into a gas station for directions if you get lost. Use this to your advantage and educate yourself. Don’t be afraid to “stop in and ask for directions” when it comes to investing. Men and women demonstrate vastly different confidence levels when it comes to investing. In 2013, a Merrill Lynch report found 55% of women surveyed (out of a total of 11,500) said that they knew less than the average investor about financial markets and investing in general.
By contrast, only 27% of men said the same thing. But, investment performance between men and women isn’t that much different. Meaning, men tend to be overconfident in their abilities.
Professional traders, like Timothy Sykes, say that education is the number one thing you can do to improve your odds of investing successfully.
Sign Up For A Workplace Retirement Plan
If you’re new to investing, it might help to sign up with a workplace investment and retirement plan. These plans are usually pretty simple and they don’t require you to do much work. Most workplace plans are 401(k) plans, and they contain simple investments like mutual funds. Every dollar that goes into them reduces your current income taxes, too. The money grows tax-deferred and the employer often helps you out by matching your contributions up to a certain dollar amount.
Get Free Education At Work
Many employers offer free investment education seminars. These are usually in relation to the company’s 401(k) plans, but they will give you a solid foundation for investing elsewhere too. Consider attending the next time your company puts on such an event. The lessons you learn can help you invest better, smarter, with both your company’s retirement plan and other investment accounts you hold privately.
Don’t Get Emotional
According to Ben Offit, a certified financial planner with Clear Path Advisory in Pikesville, Md., you should not get emotional. When the market is doing well, you should understand that it will eventually come back down. And, then, it will go back up again. Stick it out for the long term and you should be fine. Once you get the hang of it, you won’t let the bumps and dips in the market get you excited.
Research Your Investments
There are thousands of mutual funds and individual stocks out there. It can be challenging to choose the few that will do well for you. According to Linda P. Jones, a wealth mentor and host of the “Be Wealthy and Smart” podcast, you need to remain calm and research your investments before you buy. It can be scary to make that initial investment.
What if you lose money?
Here’s a spoiler alert: you probably will lose money at some point. It’s going to happen. Get used to the idea. But, that doesn’t mean you can’t control losses or minimize risk. Pick a sector that you want to learn about or that you already know something about, and dig in. Learn as much as you can about it. Be it healthcare, retail, technology, or energy, or some other sector.
After investing in a particular sector for a while, you may see either tremendous gains or substantial losses. It’s OK. If you stay the course, and you’ve done a good job picking a fund or stock, you should be fine over the long-term. You just have to ignore short-term losses.
Before you make your first investment, research the investment and seek out trustworthy investment tips through a financial newspaper or magazine that has an edition that discusses the top “no load” or “no commission” mutual funds. Get your hands on inside industry news. News you can use to learn about the companies you want to invest in. Get a feel for the industry and how it’s doing, whether companies are poised for growth or are in a decline.
And, once you’ve found a winning company that is fundamentally strong, invest in it as much as you feel comfortable. That’s really all there is to it.
Guest post by Stephen Griffin has years of experience working with a stock brokerage firm. Always ready to help the individual enter the stocks and shares game, he writes for investment based blogs sharing his knowledge.