Every woman treads a unique financial path. Their goals, resources, timeline, and circumstances shape their decisions. That’s why investing for women mandates a personal approach. The complexity of life overrules the notion of a boilerplate strategy. Laura Kuntz shares, “I also think that women investors are often willing to access the wisdom of others. And many are relational.” She adds, “This, plus the complexity of today’s financial planning environment, can make a partnership with the right financial advisor ideal.”
In this post, we examine tips and strategies on investing for women, including insights on how to stay consistent in challenging markets.
Why Tailored Investing Strategies for Women Are Important
Fairly or not, women encounter different financial situations than most men. Women generally have longer life expectancies, which can impact investment goals and retirement planning for women. Women can also deal with career interruptions and role changes as partners and parents. “Or,” says Laura, “women may be the main breadwinner, and while that can bring a lot of pride, it can also come with its own relationship or societal pressures.” These factors inform their approach to money management, including savings and income needs.
A customized investment approach lets you concentrate on growing and preserving wealth. You can align your investment portfolio with your most pertinent goals and risk tolerance level. A unique strategy can address ongoing financial needs as your life evolves.
Investing and retirement planning for women come down to more than just managing money. These activities can create a blueprint for financial independence in spite of the twists and turns of a full life.
Investment Strategies to Think About
A few of the most proven strategies in investing for women include the following:
Diversification and Risk Management
One of the most common recommendations for investors of all kinds is to diversify portfolio holdings. Spreading capital across a wide range of asset classes, sectors, market caps, and other factors is a hedge against losses. “Give special attention to your ratio of stocks to bonds,” advises Laura. “That is a good starting point for structuring a portfolio that matches your risk preferences, and reviewing historical data can give you a sense of how that portfolio has performed in different conditions.”
If you’re working with a financial advisor, be clear and honest about your tolerance for risk. There are no wrong answers when it comes to your comfort level. Being honest can help your advisors to suggest the best investment vehicles for your portfolio—investments that will reduce your stress.
Consider Long-Term Income and Cash Flow When Investing
Cash flow is a major concern in retirement planning for women, as post-retirement income is often a fraction of what you’ve made before. Planning around that reality and timing investment withdrawals to enhance cash flow can ease some of the stress.
Pursue Education About Your Investment Options
Women can sometimes be hesitant to claim the title of “investor,” falling victim to imposter syndrome. To overcome this obstacle, stay informed about the resources that are available to you as an investor. Consider listening to podcasts, attending seminars, and networking with others to enhance your knowledge and confidence in the marketplace.
“Investing is really just about learning,” Laura encourages. “If you choose to go the route of a financial advisor, make sure they have the experience and communication skills to boil things down for you. I often say to clients that my job is to give them the pros and cons to put them in a position to make decisions they think are good for themselves and/or their family.”
Set Goals for Your Investments
What is it that you want to achieve through your investments? Whether you want to start your own business, purchase your dream home, retire comfortably, or make gifts to your children or grandchildren, having big-picture goals can clarify the best path to take as you compare various investment options.
Overcoming Common Obstacles
All investors encounter risks and challenges. Women, however, have a few characteristics that distinguish them from their male counterparts.
Many women temporarily halt their careers to start families; women do this far more often than men. This can cut into earnings, resulting in savings challenges and reinforcing the gender pay gap. Navigating divorce and transitioning after a spouse’s death can affect investors across the board, but these times are especially challenging for women.
The key here is education. Everyday investors have more access to educational resources than before. Staying updated about changing tax laws, market trends, and events that impact investments is crucial. Making adjustments and rebalancing assets as changes occur can maintain your portfolio’s strength.
Support in Your Corner
Investing and retirement planning for women don’t have to happen in a vacuum. An experienced financial advisor (especially one who focuses on women’s unique needs) can help you boost your financial literacy.
When looking for a financial advisor, it’s a good idea to prioritize fiduciaries. They are required by law to put clients’ needs first and make appropriate decisions. As fee-only advisors, they charge clients strictly for their time and effort, not commissions on product sales.
Investing for Women: It’s Easier With Comprehensive Support
Laurel Wealth Planning LLC focuses on financial strategies and advice for women in all stages of life, especially those eyeing retirement. Clients contact the LWP team for financial advice, innovative strategies, and support as they navigate the investment landscape.
To schedule a complimentary meeting, email laurel.wealthplanning@laurelwealthplanning.com or call (952) 854-6250. Find out whether the Laurel Wealth Planning team is the right financial advisor for you based on your wants and needs.
The foregoing content was prepared by Indigo Marketing Agency with verbiage, opinions, and/or financial commentary input provided by Laurel Wealth Planning.
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