Investing For Women: Why Women Make Excellent Investors

Investing

By Guest Contributor Nancy Tengler, author of The Intelligent Woman’s Guide to Stock Investing.

One thing is sure: women are increasing their role in business.  According to a report published by the Small Business Association (SBA), “women-owned businesses account for 28.7% of all businesses nationwide” (2007 Survey of Business Owners).  And in the past sixteen years women- owned businesses have grown at 1.5 times the national average according to a study conducted by American Express OPEN.  The study also found that these businesses “grew at a faster rate than all but the largest publicly traded companies” (Banc Investment Daily).

Women Are Financially Strong but Lack Investing Confidence

It is also true that women’s control over the nation’s wealth is also increasing.   The numbers are hard to pin down; some say women control $14 trillion soon to be $22 trillion.  Others place the number at closer to $8 trillion.  A great deal of money no matter how you calculate it.  Yet, fewer than 20% feel well-prepared to make financial decisions. Add to that the fact that women tend to live at least a decade longer than their husbands.  A 2007 study by Thakor and Kedar revealed that 80% of men die married, while 80% of women die single. It is, therefore, safe to assume that at some point in a woman’s life she is going to be required to make important financial decisions.

Getting To Know the World of Finance

I meet very smart and competent women all the time who either ignore their investments or delegate the decisions to their advisor or husband, brother or friend.  Yet, women possess all the attributes of good investors.  Somewhere along the line most women were not properly introduced to the world of finance and seem to lack confidence as investors.

A problem easily solved.  Just as you take an interest in your health though you are under the care of a physician–educating yourself on the right foods and fitness–the same should be true with your wealth. Even if you have a financial advisor you must understand what is in your portfolio and why and whether your holdings match your long-term goals.  If you don’t have an advisor, you can still generate long-term growth in your wealth.  In fact, your hurdle for excess return will be lower because you aren’t paying a hefty fee.  I’ve written many times about the eroding effects of management fees–most recently on Yahoo.

Tip On Getting Started Investing: Gain Knowledge Every Week

Start with the informative articles you find on the site.  Make an electronic file with good investment ideas you find there and pay attention to the news and performance of those investments.  Each week, each month, you will become more knowledgeable.  And knowledge reduces your fear increasing your confidence as an investor (see my recent NerdWallet.com post).

Investing is not magic.  It is a discipline.  And with a little effort and time you can turn a flabby, sickly investment portfolio into a muscular (and therefore bigger) pool of wealth.

Looking to open up your first online investing account?  Check out and sign up for NerdWallet’s favorite online brokerage accounts here.