It’s not that women don’t want to invest, but rather it’s something that we don’t even consider: it’s estimated that 9 out of 10 women haven’t even thought about investing!
There are various explanations for these figures: from lack of education to lack of opportunity. However, an overarching theme is that markets simply aren’t “speaking the right language” for women.
At SHEINVESTS, we’re here to be your translators...and we’ll start by shattering some key myths about investment to get you started.
Money makes money
You don’t have to be a millionaire to invest. In fact, most brokerage firms will only ask for a minimum of £500 to start your portfolio.
Yes, the more you invest, the more return you’re likely to get, but you don’t have to be a complete baller to get in the game. If anything, the earlier you start the better. The effect of something called compounding (e.g. the process where an asset's earnings are reinvested to generate more earnings) will mean the percentage increase will be larger every year. So get started!
Only experts can invest
Whilst you of course need some knowledge of the market, you don’t need any qualifications to get involved with the stock market.
Our aim is to demystify stocks and their annoyingly complex jargon, and give you the real talk!
The only grade you need is confidence.
You have to know the right time to buy
Again, similar to being an expert, this is one of the biggest myths about investing. But the truth is, nobody can time the market perfectly, not even Warren Buffett.
Sometimes you’re lucky, sometimes you’re not. And it’s also not always about picking the right stock to succeed either! But that’s what we think makes it so exciting...
It’s always a risk
We won’t lie to you...the stock market is volatile. However, the trend over the past 30 years is looking up. For example, the S&P 500 has, on average, made a 7-10% return year on year for the past 30 years, and things aren’t looking completely bleak for Q2 2021.
At SHEINVESTS we won’t tell you how to get rich quick, but we will teach you how to invest for the long term and believe in what you’re doing!
For long game investments, you’ll see a rise in stocks even though the market is turbulent. There will definitely be days when the stock market is low, and there’ll be years when the stock market may even crash (during the Pandemic the stock market crashed multiple times - but people still made large gains).
The difference between investing and gambling is that you are looking at the fundamental and intrinsic value of a company. With big boys like Apple, Amazon, Tesla and Google, they’re all companies with strong leaders, impressive financials and a commitment to innovation. This means the stock price will inevitably increase - even in the crazy times we live in right now! It’s all about patience.
You should never panic sell when the market is collapsing. Holding on to your stocks is the best strategy.
Investing means giving away your money forever
Another fallacy is that investing your money means losing access; this is not the case at all. If anything, investing money gives you more freedom, and you’ll be able to withdraw your money whenever you want. But, the longer you leave your lump sum in your investment account, the more beneficial it will be (thanks to compounding again, huzzah!).
It’s worth noting that on certain types of account you may have to pay tax, but you’re allowed up to £20,000 per year tax-free income from an investment.
It’s a quick way to make money
As discussed in the Make Your Money Make Money article, the longer you leave your money in your investment pot, the greater the gains. The general time frame for investments is a minimum of 5 years, up to around 30 years. Moreover, if you could compare investments to a savings account (where the interest rate is far lower), it is actually riskier to leave your money sitting pretty because inflation will decrease the value of the pound.
Investment is a marathon, not a sprint. And whilst some may think of yourself as a Usain Bolt, most of us aren’t!
You can only buy stocks
There are so many vehicles and products that you can invest in to make your portfolio’s tailored to you and your risk appetite; there are stocks, bonds, ETFs (Exchange Traded Funds)... the options are endless.
Don’t just limit yourself to one thing on the menu. Experiment and tailor your portfolio to your appetite.
It takes ages to learn how to invest
Evidently, it takes some time to understand the stock market and the intricacies of how markets move. However, it is a skill which you can only learn by practising and doing. Nobody would expect you to know how to ride a bike without falling off and getting back on it again.
Like anything in life, it takes time and commitment.
So, don’t be afraid to get stuck in!