THERE is a perception that investing is a man’s world and that women lack confidence and tend to stay away. This isn’t true. Various studies have proven that women are better investors. According to Louanne Lofton’s book Warren Buffet Invests Like A Girl, women have all the skills to achieve long-term success in the market.
John Coates, a former Wall Street trader, found evidence of a connection between testosterone, risk taking and irrational exuberance. The increased risk-taking is not based on superior knowledge or skill but rather a chemical reaction to testosterone.
Coates argues that as women have lower testosterone levels, they are less prone to the irrational exuberance associated with stock market bubbles. Generally, women will fare better because they will take less risk, worry more about losses and earn more.
Today’s women have greater earning capacity, disposable income and purchasing power. According to UOB Malaysia, credit card spending amongst Malaysian women grew 129% from 2011 to 2016. But still, some women are not keen on investing. Instead, they aim to grow their savings accounts. It’s a practical wealth preservation approach, but it’s not enough to counter inflation and achieve true financial independence.
The most common reasons heard (amongst others) are that investing is risky, they have no time to learn how and “Is investing Shariah-compliant?” Let’s look at overcoming these limiting beliefs.
To invest well, take calculated risks.
Good investors do not risk doing something unless they know what they are getting into. Adequate research is the first crucial step to knowing if you are buying a good stock.
You don’t need a lot of money to start investing.
Let’s say you want to buy a share on Bursa Malaysia; the minimum trade is 100 shares. If the cost per share is RM1, then you only need RM100. Imagine if you invested in Nestle Malaysia 10 years ago with RM3,000, when the share price was about RM30 per share. Today, with a share price of RM150 per share, that RM3,000 would now be RM15,000, excluding dividends.
You don’t have to look at the market every day.
Learn the concept of “Value Investing.” It’s a long-term strategy to acquire fundamentally strong stocks that are undervalued or trading at less than their intrinsic value. According to Pauline Teoh, Director of 8VIC Global Pte Limited and a successful investor, value investing is a helpful method for women who lead a busy life as a wife, mother and career woman.
Value investing is also used by famous investors such as Warren Buffet, Charlie Munger, Walter Schloss and Sir John Templeton. It focuses on three key things – a great business model, good management and a good price. Investing in the stock market is not just about buying a share; you are investing into a business – so pick a great business.
Teoh adds, “A great business continuously makes good money and their earnings can grow. Beyond the business and management team, buy in at a good price; ideally, you would buy the stock at an undervalued price.”
About 76% of securities on Bursa Malaysia are syariah-compliant.
Bursa Malaysia has a diverse range of syariah-compliant products – for peace of mind when choosing your investment. There are many good opportunities for Muslims to invest in great businesses on Bursa Malaysia.
Helping more women invest.
While these general guidelines are a good start, Bursa Malaysia also has various initiatives and avenues from webinars and investment fairs to educate, increase awareness and help all investors navigate and succeed in the world of investment.
Take the first step, and visit https://ift.tt/1PlT1Lz to fill in a lead form and choose your preferred broker, who will initiate contact within three days. Women can be successful at investing, and we are proud to help.
Part of a series of articles by Bursa Malaysia to educate, develop and empower everyday investors.
source https://www.thesundaily.my/business/investment-a-woman-s-secret-weapon-AD1324255
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