According to research done by Kiplinger, females are more methodical long-term investors than men. In general, we save more and we trade less. This means we don't expose ourselves to the friction costs of investing, which ultimately eat into any margin earned. Therefore, we earn more on our investments annually. Additionally female investors tend to be less eager to sell than male investors, which is ironic as most of the best investors say their worst decisions have been sell decisions.
Taking the first step towards investing can be daunting. I have first-hand experience of this. Fear is natural but what makes investing so worthwhile, is that the benefits far outweigh the risks. Since entering the market two years ago as a novice investor I have built up fundamental knowledgeable and understanding, my portfolio has expanded (better than any savings account or managed fund has returned for me), and I have really enjoyed the journey so far. However, I have really been struck that as a female investor I'm part of a very small minority, which doesn't help tackling that daunting fear I mentioned earlier, but rather exacerbates it.
At a recent hackathon I dug deep in this phenomenon to understanding the core reasons as to why more women either don't invest at all or at least to the same levels as men, despite it being proven that women are more successful at it. The main reasons I came away with were perception of affordability, potential risk, lack of trust, not knowing where to start and a lack of guidance.
The great thing about all of these challenges is that they all have solutions entirely within our own control. Given our natural predisposition to successful investing, I think it's about time that more women owned their financial future. I wholeheartedly believe, from first-hand experience, that stock market investing offers the best long-term opportunity to do so.
Here are five simple ways that have built my confidence to get started, and hopefully they will help you too.
This is a scary thought, right, but it doesn't have to be. Starting is the most important step that essentially requires two things - time and money.
Time relates to the hours you are willing to invest in building the knowledge necessary to reduce the risks associated with making uninformed decisions. It's important to know the basics. I found the perfect app that helped me get started. Start where ever suits you best, but the important thing is to get started. Your knowledge also relates to the length of time that you are comfortable investing, which will change your potential for higher returns-- hence the importance of getting started, now.
The second thing that is required is money. People presume they can't afford to invest or that they need thousands to get started. When realistically you can start with as little as ten dollars (although I recommend starting with a bit more than that, so that you are cushioned against the costs of investing - transfer fees, commissions etc.). Many apps offer fractional share investing, meaning you can buy a fraction of a share if the full share price is too large for you.
I believe that there is no better experience than that which is gained from the actual act of investing. Once you make your first move you are committed and this sense of commitment will lead you to understand, with greater clarity, how stocks and the stock market operate.
I adopt the 'buy-and-hold' philosophy. This requires buying part of the companies that you understand and believe in, and holding them for the long term (ten+ years). The reason I adhere to this philosophy is because it has been tried, tested and proven to be the best way to outperform the market.
Never Borrow to Buy
Borrowed money comes at a cost, usually in the form of interest, which will over time eat into your returns. As a good habit, with each paycheck I receive, the first thing I do is save ten percent of my salary. Save whatever you can and before you know it you'll have a nice little bundle to dedicate exclusively to investing. Or, you could follow the rule of investing what you can, when you can and on a regular and fixed period each month.
That famous adage, 'don't put all your eggs in one basket' can be perfectly applied to stock market investing. By spreading your risk across different stocks in various industries and diverse territories, you are providing yourself with the best opportunity to reduce your exposure should the market take a turn for the worse. Over time aim to build your portfolio to 12 stocks or more. You could even start with an ETF, which offers instant diversification.
Buy What You Believe In
Reflect on the brands that you consume every day. Whether it's Amazon, Apple, Nike or Netflix, start to build up your knowledge of what goes on behind the scenes of these companies. All listed companies have an Investor Relations page on their website. You can start there and get to know the nuts and bolts of the company.
From my experience investing has been a very enjoyable pursuit because I've invested in businesses that I believe in and understand. I have also learned a lot about new sectors, emerging trends and the broader business world along the way.
Since I began to invest it has only been a positive experience for me - even when the stocks that haven't performed as I expected have provided a learning opportunity. While some mistakes may be made along the way, there are ways to minimize these risks. Follow these five simple steps to build your confidence. Start today and enjoy the journey.
Women of the Middle East have made significant strides in the past decade in a number of sectors, but huge gaps remain within the labor market, especially in leadership roles.
A huge number of institutions have researched and quantified trends of and obstacles to the full utilization of females in the marketplace. Gabriela Ramos, is the Chief-of-Staff to The Organization for Economic Co-operation and Development (OECD), an alliance of thirty-six governments seeking to improve economic growth and world trade. The OECD reports that increasing participation in the women's labor force could easily result in a $12 trillion jump in the global GDP by the year 2025.
To realize the possibilities, attention needs to be directed toward the most significantly underutilized resource: the women of MENA—the Middle East and North African countries. Educating the men of MENA on the importance of women working and holding leadership roles will improve the economies of those nations and lead to both national and global rewards, such as dissolving cultural stereotypes.
The OECD reports that increasing participation in the women's labor force could easily result in a $12 trillion jump in the global GDP by the year 2025.
In order to put this issue in perspective, the MENA region has the second highest unemployment rate in the world. According to the World Bank, more women than men go to universities, but for many in this region the journey ends with a degree. After graduating, women tend to stay at home due to social and cultural pressures. In 2017, the OECD estimated that unemployment among women is costing some $575 billion annually.
Forbes and Arabian Business have each published lists of the 100 most powerful Arab businesswomen, yet most female entrepreneurs in the Middle East run family businesses. When it comes to managerial positions, the MENA region ranks last with only 13 percent women among the total number of CEOs according to the Swiss-based International Labor Organization (ILO.org publication "Women Business Management – Gaining Momentum in the Middle East and Africa.")
The lopsided tendency that keeps women in family business—remaining tethered to the home even if they are prepared and capable of moving "into the world"—is noted in a report prepared by OECD. The survey provides factual support for the intuitive concern of cultural and political imbalance impeding the progression of women into the workplace who are otherwise fully capable. The nations of Algeria, Tunisia, Morocco, Libya, Jordan and Egypt all prohibit gender discrimination and legislate equal pay for men and women, but the progressive-sounding checklist of their rights fails to impact on "hiring, wages or women's labor force participation." In fact, the report continues, "Women in the six countries receive inferior wages for equal work… and in the private sector women rarely hold management positions or sit on the boards of companies."
This is more than a feminist mantra; MENA's males must learn that they, too, will benefit from accelerating the entry of women into the workforce on all levels. Some projections of value lost because women are unable to work; or conversely the amount of potential revenue are significant.
Elissa Freiha, founder of Womena, the leading empowerment platform in the Middle East, emphasizes the financial benefit of having women in high positions when communicating with men's groups. From a business perspective it has been proven through the market Index provider MSCI.com that companies with more women on their boards deliver 36% better equity than those lacking board diversity.
She challenges companies with the knowledge that, "From a business level, you can have a potential of 63% by incorporating the female perspective on the executive team and the boards of companies."
Freiha agrees that educating MENA's men will turn the tide. "It is difficult to argue culturally that a woman can disconnect herself from the household and community." Her own father, a United Arab Emirates native of Lebanese descent, preferred she get a job in the government, but after one month she quit and went on to create Womena. The fact that this win-lose situation was supported by an open-minded father, further propelled Freiha to start her own business.
"From a business level, you can have a potential of 63% by incorporating the female perspective on the executive team and the boards of companies." - Elissa Frei
While not all men share the open-mindedness of Freiha's dad, a striking number of MENA's women have convincingly demonstrated that the talent pool is skilled, capable and all-around impressive. One such woman is the prominent Sheikha Lubna bint Khalid bin Sultan Al-Qasimi, who is currently serving as a cabinet minister in the United Arab Emirates and previously headed a successful IT strategy company.
Al-Qasimi exemplifies the potential for MENA women in leadership, but how can one example become a cultural norm? Marcello Bonatto, who runs Re: Coded, a program that teaches young people in Turkey, Iraq and Yemen to become technology leaders, believes that multigenerational education is the key. He believes in the importance of educating the parent along with their offspring, "particularly when it comes to women." Bonatto notes the number of conflict-affected youth who have succeeded through his program—a boot camp training in technology.
The United Nations Women alongside Promundo—a Brazil-based NGO that promotes gender-equality and non-violence—sponsored a study titled, "International Men and Gender Equality Survey of the Middle East and North Africa in 2017."
This study surveyed ten thousand men and women between the ages of 18 and 59 across both rural and urban areas in Egypt, Lebanon, Morocco and the Palestinian Authority. It reports that, "Men expected to control their wives' personal freedoms from what they wear to when the couple has sex." Additionally, a mere one-tenth to one-third of men reported having recently carried out a more conventionally "female task" in their home.
Although the MENA region is steeped in historical tribal culture, the current conflict of gender roles is at a crucial turning point. Masculine power structures still play a huge role in these countries, and despite this obstacle, women are on the rise. But without the support of their nations' men this will continue to be an uphill battle. And if change won't come from the culture, maybe it can come from money. By educating MENA's men about these issues, the estimated $27 trillion that women could bring to their economies might not be a dream. Women have been empowering themselves for years, but it's time for MENA's men to empower its women.