Women make up half of the world’s population. It therefore seems quite natural and obvious that women should play an important role and make a significant contribution to the economic development of any country. But long-standing inequalities and traditions have prevented women from fully participating in and, more importantly, benefiting from economic performance and particularly financial markets. In fact, few studies have put women at the center when it comes to finance.
Luckily there is light at the end of the tunnel. Namely, we have seen a positive shift since the onset of the COVID-19 pandemic, which appears to have forced traditional investment houses to take notice of this long-ignored segment of the population.
With a third of the world’s wealth under their control, women are a formidable economic force. Women are growing their wealth faster than ever before, outpacing the growth rate of the wealth market as a whole. For example, did you know that according to a 2020 study by BCG, women are responsible for adding $5 trillion to the global wealth pool every year? Or did you know that women now control over 32 percent of global wealth and are responsible for a staggering 85 percent of consumer purchases?
Given these numbers, why are women lagging behind when it comes to investing and trading in the stock markets? And how can we increase participation on an individual level to increase financial freedom?
Entry into the investment
Traditionally, women have taken on the role of bookkeeper in their household while men have made the investment decisions. However, as women take control of their own investment decisions, they need to understand how to mitigate risk and balance their finances for short- and long-term gains.
If you’re looking to balance your finances between the short and long term, the best recipe is to learn how starting small generally leads to long-term success. Instead of large individual amounts, investing smaller amounts each month helps to spread the risk.
By buying small amounts each month, you end up buying the average price for that particular stock for that year, reducing your risk. Year after year, the average price of this stock increases and so does your investment. This is especially a great time to invest in the regional market as it is firmly establishing its prowess in the global market.
There is also the opportunity to participate in the region’s successes. Investing in local and regional markets such as Dubai Financial Market (DFM), Abu Dhabi Securities Exchange (ADX) or Saudi Stock Exchange (Tadawul) could also be an interesting option for investors.
Here are a few tips to get you started building your financial future.
1. How much
It doesn’t take as much as you think to start investing. A small but fixed monthly amount is enough to get you started. This amount should depend on your income and how much you have left over each month after paying your bills and setting aside for your emergency cash (if you don’t already have a sufficient amount of emergency cash).
2. Diversify
As the old saying goes, don’t put all your eggs in one basket. In this case, you shouldn’t invest all of your money in one stock or one type of asset. Instead, you might consider investing in ETFs (mutual funds that hold multiple stocks) or a range of companies you know and trust. You can also look at real estate or commodities like gold – whatever suits your investment strategy. Just be careful not to put all your money in one “basket”.
3. Tools
It is important to choose a trading platform that will ensure that investing is easy and inexpensive while also helping you to keep learning. It is important that the platform helps remove friction and complications so that you can invest and trade seamlessly and transparently. It is also important that the platform clearly communicates how it prices products and the costs involved. Remember trading and investing doesn’t have to be expensive and from a cost perspective there has never been a better time to invest and/or trade the markets.
4. What to choose
A simple tracker fund is an easy place to start. What they do is track the performance of a specific stock market using an exchange traded fund and give you the information you need about companies you’ve heard of and know about. This can help you understand the fee structure so even if you can only invest a small amount, it doesn’t go away before it hits the exchange. But remember, as a rule of thumb, the sooner you need the money, the less risk you should take. Always make sure you understand the products you are trading and investing in before you start.
Finally, remain calm and steadfast. Be patient instead of impulsive and reap the market’s long-term gains.
So why wait? Start now.
Financial literacy and awareness can not only help secure our financial future, but also our future generation. Because empowerment is an all-around thing, and financial empowerment is key to finding a seat at the table, both figuratively and literally.
Joy Dabeet is CMO at amana
Read: Why gender equity in tech matters more than ever
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