I have heard many reasons women put off starting to invest (or participating more in the management of their portfolios) but the following three are by far the most common.
1. It is too complicated to get startedYears ago it may have been harder to get started, but then this great thing called the Internet came along and the truth is, never before in history has it been easier to create and successfully manage an investment portfolio. If you can buy a few sweaters and a pair of jeans online from the GAP, you know almost everything about getting started with investing. With even just $100 per month you can jump online, open an account and set up monthly purchases of well-diversified, low-fee Exchange Traded Funds ETFs (more on ETFS in Core Lesson Four).
Imagine if you never learned how to drive? Would you not regret the freedom it affords you today? It is the same with investing. Take the time to learn the basics today, and in a few years, you will enjoy both freedom and gratitude from your decision.
2. It's super riskySomeone once told me they would never invest in the stock market because they did not want to lose all of their money. It doesn't quite work like this. I have found that investors tend to have been overly influenced by their first experience with investing.
Perhaps they took a hot stock tip from their Dentist and lost 90 per cent of their investment. And so now, without any further research, they have decided that investing is high risk. With proper asset allocation, you can structure your level of risk to best match your comfort level and tolerance for any losses.
Yes, investments can go down. But if you stick to diversified stocks and bonds, there has never been a time in history that they did not come back up. Education and patience are all you need. I'll cover the education if you'll take care of the patience!
3. The professionals know better than you doWhile financial advisers may have more information than you, hundreds of studies over the past 10 years have shown that this knowledge does not translate into higher returns for you. (Although those same studies have shown it does translate into higher fees for them!)
I will cover financial advisers in another post (because there are some great advisers, and like any profession, including yours and mine, good advisers need to get paid).
But please, do not assume that just because you are at the beginning of your investing journey that you need to hand all decisions over to an investment professional. I have worked with many women, who after learning the basics of investing, took over managing their own portfolios and never looked back.
If you have not started investing, what are you waiting for?
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