August is Women’s Month and Ecsponent would like to see more women becoming money masters. Statistics not only show that females often beat their male counterparts when it comes to making good investment decisions but more importantly, we believe that women are the glue that holds society together. Therefore, we must continue to empower women to be more financially independent.

 

What do statistics show about women and their investment habits?

Women generally have a lower appetite for risk than men, with only 31% being willing to take higher risks with their investments compared with 48% of men. Just over 70% of women consider themselves savers, rather than investors. Research by Galileo has also shown that women control almost $20 trillion in global spending.

 

More and more women hold very high positions on the JSE

Fewer than 4% of listed companies have female CEOs however, it is encouraging to see that the percentage of women that serve on executive boards of JSE-listed companies increased from 14.5% to 18.6%. Most importantly, the CEO of the JSE, Nicky Newton-King, and four out of the six members of her team are women.

 

What makes women effective investors and why do more women not invest even more?

Women take more time to consider advice from financial advisors, but once confidence has been established, they will be loyal clients who maintain the relationship in the long-term. They also usually take more time to explore investment opportunities before making decisions. They have more patience, while men tend to be impulsive and try to predict the market.

In addition, women prefer to work in groups to learn about finances, while men usually prefer to learn independently. However, the returns shown for female investment groups are 4.6% higher than male groups. This could be ascribed to the fact that the fairer sex is more systematic with their research, ask more questions and want to understand the investment.

 

How do women manage risk?

According to Credit Suisse, women view money in a broader context and , they are more prone to link money to security, independence and quality of life for their families. Women tend to focus on long-term goals, such as saving for their children’s studies, whereas men are generally more competitive; constantly comparing their returns and focus on short term performance of their investments.

Supporting the idea that women are better investors, Warren Buffet, one of the world’s top investors, says he is successful because he “invests like a woman”. According to Buffett, it is not intellect, but temperament that ensures long-term capital growth. Like most female investors he is careful, does not follow the herd and sticks to his investment decisions, regardless of the fluctuations in the market. He takes risks, but never gambles.

 

What are the challenges women face when investing?

Women tend to save less enthusiastically for their retirement than men. They often delay taking the first step to invest and lose more money by not investing at all, compared to losses by making wrong stock investments.

In general, women earn less and are therefore able to save less. This is partly because women stop working, sometimes for as long as twelve years, to raise children and then return to work at a lower salary to make up for lost years.

The result is that they often have to continue working longer and need to save more to retire independently. Also, women on average live five years longer than men and should therefore save approximately 15% more than men for their retirement.

 

Market update

The rand remains under R14 against the dollar which is a positive indication and we predict that there will be an impact on the rand following the national elections tomorrow. Good news for consumers- Brent crude oil is down by $3 per barrel and is currently trading at $42.13 per barrel of Brent crude.