Johannesburg - When it comes to financial management, women are known for being risk averse and for choosing investments that are “secure” and “comfortable”.
However, there’s a growing number of women who are choosing to invest in stocks which yield higher returns to sustain their lives.
Over the past few years women have been playing a bigger and more prominent role in business and their earnings are increasing, which is contributing to their empowerment.
More women are choosing to invest in stocks as they become more sophisticated investors with surplus income to invest, explained Christelle Louw, Advisory Partner of Citadel.
Online trading platforms encourage share trading.
“I find that often a client will start a portfolio online and when it reaches a sizable amount, the client will ask for support and guidance on the structuring of their portfolio on a co-managed arrangement with a professional,” she explained.
CFA and Independent ETF Strategist and Advisor, Nerina Visser, told Fin24 that the convenience of investing on online channels contribute to women’s interest in stock trading.
“The investment industry can be patronising, especially towards women. Not a lot of women feel empowered enough to sit across a table from a financial adviser and actually challenge them on some decisions,” she said.
The anonymity of an online channel makes it easier for someone patronised by traditional industry to take control of their investment decisions.
READ: Investment: A little bit of risk can reap dividends
Visser found that the risk adversity of women and men reverse as they grow older.
Men, at the outset, are more aggressive investors and want to start building up a share portfolio. Women however start with a savings account at a bank which would progress into a pension or retirement fund and then they start incorporating unit trusts. Women embark on stock trading later in life.
This is mostly because the investment goals of women differ to that of men, explained Visser.
Women don’t just invest for themselves but for their families and immediate community. Women often focus on getting returns that make them feel like they are making a difference or a contribution to society, rather than just getting the highest return in monetary terms, she explained.
Male investment portfolios contain traditional asset classes, that includes a share portfolio, unit trust portfolio, equities, property and bonds. Whereas women get involved in alternative investments.
“Looking at financial instruments women use, they have a much more diversified overall investment portfolio, outside traditional investment markets.”
This includes work done in rural community development, or giving a loan to someone.
“One would not think of it as a financial instrument in the traditional sense,” added Visser.
“As women get older, and have been able to empower their children or get their community on a stronger footing, they have less strain on their personal resources,” she said. This means in their personal capacity they can afford to be more risk seeking.
Commenting on the investment advertisements targeted to women, Visser said that empowered women would find some to be condescending. Women who have not yet considered stocks could find it intimidating.
“I do think the industry plays to stereotypes which inhibit women from embracing opportunities in the stock market,” said Visser.
Advertisements which reflect reality and bring a message of empowerment are stronger than those with opaque promises of “hope” and “trust”. Women appreciate the honesty and transparency, explained Visser.
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