Essential Tips On How to Start Investing

The winds of change are blowing stronger than ever. Today, women are rewriting the rules and making their mark in every sphere of life. Women are smashing through the glass ceiling and paving the way for a new era of empowerment across all verticals, be it politics, sports, or finance.

In India, the employability of women in the workforce reached a promising 51.44 per cent in 2022, signalling a significant stride towards gender equality.

However, despite the progress, one critical factor that continues to elude many women is financial independence.

A report revealed that women know the significance of standing on their own two feet financially, with many citing it as one of their top three goals in life. Yet, a report by DSP Winvestor Pulse 2022 highlighted that 65% of men were seen taking investment decisions largely independently, as compared to 44% of women.

But what is interesting to know is that women's investment portfolios tend to yield higher returns in comparison to those of men. For example, a review by ET Money indicated that women investors generated better returns than men between 2017 and 2020.

Furthermore, amid this transforming landscape, a woman whose remarkable journey stands as a testament to the rising influence of women in finance is Gita Gopinath. A trailblazer hailing from the Indian education system, Gita has shattered barriers to become the first Indian woman to hold the prestigious position of Managing Director at the International Monetary Fund (IMF). But Gita's story is not an isolated incident. It reflects the innumerable women who are embracing the chase of financial independence, armed with knowledge, determination, and a burning desire to reshape their financial destiny.

This leads us to the question on most women's minds: — How and when is a good time to begin investing?

To all those women who feel unsure about investing, here are ways to help you, become self-sufficient and own the story of your finances.

Do not wait for the right time to invest The only right time to invest is right now. The sooner you start, the higher the sum that can be accumulated.

Attain financial literacy

Financial literacy has emerged as a critical factor in women's drive towards financial independence. With knowledge of fundamental concepts such as budgeting, saving, and investing, along with delving into more multifaceted areas like taxes, credit, and retirement planning, women can equip themselves with the knowledge needed to make well-versed financial decisions.

Today, women are taking the baton forward and shaping their financial destinies like never before. They are actively managing their finances, creating budgets, and investing in diverse assets such as mutual funds, stocks, bonds, and insurance, all to secure their future.

Crafting a goal-oriented investment strategy

Investing based on sentiments, market movements, and momentum can result in poor investment decisions. To avert this, a simple and effective investment approach is to invest according to definite goals. By setting a clear goal, defining a time frame, and hand-picking appropriate investment products, one can reduce the need for continuous market monitoring. A goal-based tactic can help with staying attentive and averting emotional investment decisions.

Consider the tenure of your investment

If one is looking for immediate returns, one should choose a short-term instrument. However, if their goal is not an immediate one, they should invest in a long-term tool.

Understand the risk involved in the investment

Each investment tool carries a certain level of inherent risk, which may impact the returns that one will get at the end of the tenure of the investment. Women should ensure that the risk involved is aligned with their risk appetite.

The advantages of investing for women are plenty and on top of that it wings your own financial goals and backs support to progressive decisions. Every woman should start investing as soon as they can. The best example that I can offer here is sowing trees with sweet fruit expectations.

Remember fruiting needs requisite time and we have to give that.  If you want to taste the fruits of your tree, sow the seed as early as possible. 

VLA AMBALA is a SEBI registered Research Analyst and founder of Stock Market Today. 

Suggested Reading: The Rising Wave Of Women As Financial Decision Makers