In this recap series of The Future Is Female conference 2017, we dive into one of the panels, How Women Thrive In Investing
Do men and women invest differently? Are women more conservative with investment methods? Together with the moderator, Sunita Gill, Founder of E&N Global Holding Pte Ltd, the panellists sought to discuss how women can thrive in investing.
How can women start investing, and is there a different way that men approach investments?
Varun Mittal, Associate Director, FinTech of Ernst & Young: Let’s start by understanding that passive investing is better than active investing. If you have an income trade of analysing stock and looking at long term, it requires more patience. Guys are always more impatient. Women who have the patience to not act impulsively is very important and this trait is very important when it comes to making investment decisions.
Ketki Sen, Co-Founder and Partner of Spinta Global Accelerator: While traditionally we believe that gender is binary, science is telling us it’s a spectrum and it’s more about the uniqueness of each individual. Today women command a huge amount of the world’s wealth. According to a 2016 Fidelity study, women actually hold 40% of the world’s private wealth. So women are influencing wealth and creating wealth, but are we investing?
I come from a family of three daughters with a father who mentored me in my investments. It is always scary to jump into the dark. It is key to find a great mentor – whether a friend, a family member or financial advisor. My first salary went into mutual funds and along the way, I was lucky to be friends with great financial advisors. I was very judicious in finding new financial advisors. I go to different banks, I do my research and find financial advisors who understand me.
My eldest sister knew nothing about investment, but she taught herself to build her own portfolio and now she is able to provide for our mother who is a homemaker and for her own family.
Often times women are faced with stereotypes that we have to deal with. We’ve been told that investment is a man’s game and this is something we need to overcome. Women don’t want to be patronised, we want to be understood. We don’t want jargon and we want things to be explained in simple terms. I don’t think an investment is gender specific. As long as you understand us and our goals, we’re ready to invest.
Mouna Aouri, Founder of Woomentum: Research shows that 74% of women in Singapore who are served by wealth managers are really dissatisfied. This comes from the fact that wealth managers do not understand what’s important for them and they have a gender-neutral approach to the management. Research also shows that women are more interested in achieving their personal goals through investments rather than performance, while men are more generally interested in performance, trading quickly and adding more stocks while women are slower in trading and thinking more about how they can invest in a company that can really relate most to what they care about.
I think men and women have complementary skills and they bring different things to the table. Right now we don’t see many women investing, but we have hope as seen by the large audience today! Hopefully, in the future, we will have more data to share on women and investing!
What traits do you think are important to be a good investor?
Junie Foo, Head Corporate Banking Singapore, Bank of Tokyo-Mitsubishi UFJ Ltd: Start early. When I first started work, my brother became an insurance agent and I invested through him. If you have someone you can trust or have looked for a good financial advisor, start. Save as you earn, invest as you earn. The trajectory is long, your runway is long. Try and hit investment milestones. You don’t have to invest in difficult funds. What you don’t understand, do not invest. It’s that simple.
Ketki: Studies say that overall, women who are hedge fund managers have better portfolio performance! The great thing is that women do try. It’s not about men or women being better than the other, it’s about measuring your own performance.
What do you think are our characteristics that compromise our decisions?
Ketki: Women can be insecure, and have a lack of confidence. When we learn about investments, we learn that there is a risk. If we liberate ourselves from that fear today and realise that gender stereotypes will only pull us back, we will be able to achieve what we want.
First thing, become aware that there is fear. Overcome it, and take the first step. There are two barriers to success for anyone. One is not starting, and second is not persisting with it. So take the plunge. It doesn’t matter if the first thing is to open a fixed deposit account. Invest in your first mutual fund. Find out from a friend who is already investing what you should do. Women are not afraid to ask when they don’t know so find a financial advisor and learn.
There is a stereotype that women are more emotional when it comes to decisions. Is it true from your experience in the way your wife invests, and do you think it’s a good or bad thing?
Varun: Women are emotional in some aspects specifically to some asset classes, from their own home. The value they attach to having an own home would be different to the value men put towards it. Yet women look towards the horizon – they look for the longer horizon investment while guys look for short term or near-term investments. It’s not a question of good or bad. Sometimes short term gains are better when you know the longer horizon investments are too vague. Emotions can go both ways. Where there is peer sentiment on investing in a particularly stock or industry, the moment is going north, it goes north really fast, and the moment it goes south it goes south extremely south.
Ketki: Look, even Warren Buffet says to invest like a woman and both men and women who follow him are successful. Yes, money is an emotional currency for women because we associate it with our liberation, independence, career, and our ability to take a sabbatical when we have children. But does it mean that we are emotional when it comes to investing? Perhaps yes, but the investment is all about psychology. You have to know yourself first and you have to understand your emotions. Both men and women need to manage their emotions to achieve the results. Have a plan and stick to it.
What is the biggest investment challenge that women face?
Mouna: Women are outnumbered in any activity in the business world and there are numbers to show it. Some say it’s because we started late. It’s okay, we can catch up, and more importantly, it’s about collaboration between both genders. But acknowledging there are gender-specific challenges is important. Why? By knowing the problem, we can provide the solution. By knowing the problem we can prepare ourselves to rise to the challenge and really understand the environment and ecosystem where we are evolving.
When it comes to wanting to donate or investment for equity, it’s very important for women to relate to the cause or the social impact. Women care about change, they want to be a change maker more consciously than man. I think the challenge there is that it is still not sexy to talk about the social impact and change when it comes to talking about investment, especially in the stock trading environment. The more we see women investors in the ecosystem the fewer challenges they will have.
What can women learn from men in investing?
Varun: It’s good to be stubborn, the right way. Women can be influenced by their surrounding easily. If there is peer pressure and many other women are doing something, they can get influenced easily. In investment, a lot of time, just because it’s successful for the two people surrounding your left and right, it does not mean it will be successful for you. To be able to hold that down and say no, that you don’t understand therefore you are not going to invest, that stubbornness can help you get out of a bad investment.
What type of careers can women pursue in investing?
Ketki: It’s a question of understanding your aptitude, where is your interest, what is your values system, where do you want to make that difference, and then going out to equip yourself with the knowledge to jump into that career. Women can do any career.
How can one recover from investment loss?
Ketki: A good investor knows how to make a profit, and a great investor knows how to take a loss. We all have to know how to accept failure. Any investor would have made a loss. Understand why the loss occurred. Was it due to emotional investing? Did you get into the market because there was a lot of hype and you invested without really understanding what you invested in and the value you invested in dies not commensurate with the price you pay? Cut your losses. Have a game plan.
Ketki: Women earn less, salaries peak faster, and live longer. If you don’t have a game plan today to work towards, you will be left in a state where you cannot work towards your dreams. Map your goals and put a dollar value to it. Find easy ways of investing. See how it works for you and learn from your mistakes.
Junie: Don’t accept lower pay. Do not accept that women are earning less. We are smart, we are capable, we work twice as hard so we get more, not less. Our generation is trying to make it right for you young ladies. So you make sure you know your stuff, and you ask that your salaries are paired with your male colleagues.
She was nominated and selected for FORTUNE Most Powerful Women conference in 2016 (Asia) and 2015 (San Francisco, Next Gen).
Anna has 10 years of experience in the financial sector and is currently a Director in Tera Capital. Her previous work experience includes positions at Citigroup, United Overseas Bank, a regional role in Business Monitor and a boutique private equity firm based in Shanghai. She graduated from Singapore Management University (Finance and Quantitative Finance).