5 Strategies Women Should Know About Investing

Women should consider several unique factors before investing. In addition to planning for retirement, women disproportionately take on unpaid caregiving and deal with lower wages when working (since we tend to live longer, on average, than men). But that doesn’t mean you can’t be prepared for life’s milestones. One way to do that is to seek out a financial advisor who can help you along the way and who understands your unique wants, lifestyle, and financial knowledge. While women have been taking over the investing landscape in recent years, it’s not expected that you would know everything there is to know about investments.1

Edward Jones offers insightful resources and tools to shed light on what to do (and not do) as you invest. Additionally, Edward Jones provides one-on-one guidance so you can feel comfortable fostering a relationship with an advisor you trust. We’ve also compiled a list that outlines investing strategies to help you get started. But remember, whether you’re a pro or novice, investing is something anyone can do given some allocated savings, proper resources, and support. With time you can have a process in place that works for you and your goals.

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Consider: Diversifying

It wouldn’t be surprising if you heard the word diversification once or twice, as it’s a crucial part of investing. Diversification refers to buying investments that act differently, so your risk is spread across multiple industries, geographic regions, and market styles. This is crucial because it can help provide a smoother ride over time in your portfolio by potentially reducing swings in value. However, diversification doesn’t guarantee a profit or protect against loss in declining markets.

Avoid: Exceeding your risk comfort level

A general rule of thumb is the higher the return potential, the more risk you’ll have to accept. While some may prefer to err on the side of caution when it comes to investing, no matter where you stand on the spectrum, you’ll have to ask yourself: What is my comfort level with risk? Once you do that, you and your financial advisor can better determine where your comfort level is and how you may react to market ups and downs over time. From there, you can also plan on assessing risk tolerance every couple of years.

Consider: Setting realistic expectations

It’s easy to fall into the trap of investing and expecting a windfall. While it has been proven that investing can boost your wealth over time,(84% of women also view investing as a tool to create choices in life)3 it’s not something that happens overnight. That said, it’s important to determine the return you’re trying to achieve – which should be the return you need to reach your goals. Once that’s done, you can base your expectations on your asset allocation, the market environment and your investment time frame.

Avoid: Trying to “time” the markets

One of the biggest mistakes you can make is trying to “time” the markets. Market timing is when you move investment money in or out of a financial market based on a prediction. You may just think you’re being cautious or strategic; however, doing so can lead to missing some of the best days in the market, receiving lower returns because you’re not invested, or switching to investments that underperform. In this area, women tend to outperform men when investing because we don’t try to time the markets as much.4

Consider: Creating a strategy

Before you do anything, you need to determine what you want to accomplish. You wouldn’t go into a grocery store without making a list first, right? It’s the same sentiment with investing. When you know your long-term goals, investment time frame, and comfort level with risk, this can help your advisor implement a strategy specifically tailored to your financial needs.

Start your journey with Edward Jones and find the right financial advisor to help you work toward your goals today.

Sources

1Bankrate, “Women and investing in 2023: Here’s everything you need to know,” March 2023.

2How to Build Wealth When You Don’t Come from Money,” Harvard Business Review, 2022.

3PIMCO, Women, Investing and the Pursuit of Wealth-Life Balance Survey, September 2018.

4FemaleInvest, “The Gender Investing Gap is Real and the Statistics Are Here to Prove It,” February 2023.

Investors should understand the risks involved of owning investments, including interest rate risk, credit risk and market risk. The value of investments fluctuates and investors can lose some or all of their principal

Edward Jones, Member SIPC.

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