Stocks for Women - Empowering Women with Financial Freedom | INVESTEDMOM
According to NerdWallet, less than half of women invest in the stock market, leaving them without a secure financial future. Over the last couple of years, more women have turned towards investing and are unafraid to set their own financial goals. Not only are women more confident now than ever before in taking on leadership roles, but they are also mastering investment processes to maximize their financial stability.
For women investors to maximize their profits, they must have a foundational understanding of stocks so that they invest confidently. Solid knowledge allows them to find the best stock options to grow their investments and attain growth within their portfolio.
As women, we understand how intimidating investing is, especially knowing that our male counterparts have traditionally dominated the investment business. At Invested Mom, we have everything you need to feel confident with investing. To help you get started, we gathered everything you need to know about investing in stocks, including the challenges women face, how to start, and what to look for to invest successfully.
Challenges Women Face
Women face many challenges in the workforce, so supporting women entrepreneurs on their path toward success is essential. Equality, which includes equal access to workplace opportunities, resources, and treatment, is a constant topic of conversation. Gender equality is not yet a reality in many workplaces.
Women are still underrepresented in many industries and often face discrimination and bias in hiring and promotion decisions. Women also face gender pay gap issues in the workplace. On average, women earn less than men for performing the same job.
Sexual harassment in the workplace is another significant issue related to gender equality. Sexual harassment is not only morally wrong but also illegal in the workplace. Unfortunately, many individuals still experience sexual harassment in the workplace, and it can have severe consequences for their mental health, job performance, and overall well-being.
Many organizations are taking steps to promote gender equality in the workplace. For example, some companies are implementing diversity and inclusion training to address biases and stereotypes that may contribute to discrimination. Other organizations are implementing policies to address the gender pay gap, such as conducting regular pay equity analyses and establishing transparent salary ranges.
Where Should I Start?
First, you should know that, according to Fundera, over 40% of US businesses are women-owned. Women no longer have to stay home and leave the financial decisions to men. Instead, women fight for gender equality and constantly seek to reduce the gender pay gap within the work industry.
With that being said, if you are holding back on investing because you are a woman, take a minute to understand that you are not alone. Many women entrepreneurs and female-led companies are successful and maximize their money through investments. Let's look at some steps you can take to feel confident in your investing decisions.
Gain Knowledge
The first step when it comes to beginning investing is to learn about the stock market. You can talk to a financial advisor or conduct your own research, but understanding how the stock market works should be your priority. Research the basics of stocks and understand the different types of stocks, including individual stocks and mutual funds. A good foundational understanding of the stock market helps prepare you for investing. Ultimately, having a solid foundation in stocks allows women to take ownership of their finances and make informed decisions about their money.
Additionally, it's important to understand how the market fluctuates. There are plenty of good and bad days when it comes to investing, and it doesn't mean you are doing anything wrong. When you lose money as an investor, it might feel discouraging, and you want to avoid another investment. Instead, great investments take courage; you must remain patient through this new experience.
Understand the Benefits
The stock market is intimidating, but understanding the benefits of having investments can help you feel motivated to continue. One of the benefits of investing in stocks is that they can help women build wealth over time. Investing in stocks allows you to earn returns, grow your savings, and achieve your financial goals. Investing wisely and efficiently will enable women to create a diversified portfolio individualized to meet their financial goals.
In addition to building wealth, investing provides women with greater financial security. Investing in stocks allows women to diversify their income and protect against unexpected events like job loss or divorce. Successful investing not only allows you to prepare for retirement, but you can also increase your savings account.
Understand the Risks
You need to understand that no investment is guaranteed. There are risks associated with all investments; at times, you will lose your money instead of gaining a profit. This risk is considered a market risk and occurs when there are changes in the stock market. The stock market is volatile and unpredictable, and changes in market conditions can lead to significant losses for investors.
Another risk involves investing in a company that experiences financial difficulties, such as bankruptcy or fraud. Investing in individual stocks rather than diversified funds can increase the risk of company-specific issues.
Inflation is another risk, and it happens when the returns on your investments can't keep up with inflation. Inflation can devalue your investments over time, so it is essential to consider this risk when investing. Liquidity is the risk of being unable to sell your investments quickly enough or at a reasonable price. Liquidity can occur if there are not enough buyers and sellers at a given time. Finally, there is the risk of interest rates affecting your investments. For example, if interest rates rise, the value of some stocks may decrease.
What to Look for?
Deciding on a company to invest in is challenging, especially if you want to narrow your search to women-led companies. Luckily for you, there are plenty of women-owned businesses that you can invest in that are successful. Before you invest in a company, though, you want to ensure that you follow some important steps.
Research the Company
First, look for women-owned businesses. Make a list of companies you're drawn to and thoroughly research them. You'll want to understand what they create or provide and what they believe their financial future to be. You want to ensure that you invest in a company with a stellar reputation and minimal risk.
Additionally, you want to ensure that the company you invest in has strong leadership. The women CEOs of the business you want to invest in should present clear expectations of where they expect their company to move financially. Not only should the CEO lead effectively, but strong leadership positions should be found throughout the company. Remember, you want to invest in a company with steady business and growth.
Market Potential
Another critical factor to consider is the market potential for the business. Look for a company with a unique product or service that meets a real need in the market. Consider the size of the market, the potential for growth, and any potential competition. Ask yourself whether the company is holding its value.
Financials
It is essential to review the financials of any potential investment opportunity carefully. Look for a company with a solid financial track record, positive revenue growth, and profitability. Consider the company's financial projections and whether they are realistic and achievable. The last thing you want to do is invest in a business that has historically lost money. Invest in women-owned companies that are growing financially.
Diversity and Inclusion
Not only do you want to continue enforcing gender equality as you invest in women-owned firms, but you can also promote gender diversity and inclusion in the business world. Look for a company that values diversity and has a diverse team and leadership that includes minority women. Consider whether the company's products or services are accessible and inclusive.
Social Impact
Many women-owned businesses and investors also focus on making a positive social impact. Consider whether the company's mission aligns with your values and whether they positively impact the community or the world.
Risks
There are risks associated with investing in any business, including women-owned businesses. Consider the potential risks and whether you are comfortable with them. For example, investing in a startup carries higher risks than investing in an established company. When you research the financial history of the company you want to invest in, you will hopefully identify the level of risk for your investment. If it is your first investment, you'll find investing in a lower-risk company more comfortable.
Exit Strategy
All businesses have a potential for failure, so you must protect your investment. To do this, you can analyze your financial situation and that of the business you intend to invest in and consider the potential exit strategy for your investment. Look for a company with a clear plan for growth and profitability, and consider whether there are potential buyers or other investors who may be interested in acquiring the company.
Find Financial Guidance
There are several ways to start investing, but an essential thing to consider is that you don't have to do it alone. Whether you are investing now and want to expand your portfolio or just get started, finding financial guidance can help set the foundation for financial independence.
Invested Mom is here to help you understand everything about investing in stocks or even initial public offering investments for women-owned startups. We want you to feel confident in your financial choices. Sign up for our course today as you head toward financial independence through investing.
Meet the Author:
Inge was born and raised in Cape Town, South Africa, and moved to Canada in 2010 looking for a better life. She always had an entrepreneurial spirit and started her first side hustle when she was 9 years old – selling fudge at school during lunch breaks.
It wasn’t until much later that she realized that saving isn’t enough to get ahead. She was always very interested in real estate, but saving up for a down payment was grueling and slow, and the demands of life kept getting in the way.
She started investing in herself and upgrading her skills while learning how to invest. She quickly became debt free and compounded her money at a staggering rate.
It wasn’t until she became a coach that she realized how significant an impact she can make in people’s lives by sharing her journey, learnings, and processes.
So here she is, advocating for everyone who is invested and wants to build their wealth, especially the mommas!