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How can women overcome the barriers to investing?

The value of investments can fall as well as rise and you could get back less than you invest. If you’re not sure about investing, seek independent advice.

Fewer women than men invest, with male ISA investors outnumbering women in all age groups. We explore some of the reasons why, and how these might be overcome.

Click to toggle accordion What you’ll learn:

How many more men than women invest.

What barriers women may face to investing.

Why it’s often a good idea not to tinker too much with your investments.

More than a million investment ISAs are held by men, compared to 870,000 held by women, according to figures from HMRC, with fewer female investors than men investors across all age groups.1

There are three main barriers to investing typically identified by women, according to independent consumer website Boring Money - willingness to engage, confidence and time.2

Here, we consider the barriers to investing cited by Boring Money and look at some ways female investors can avoid missing out on the potential for gains from investments over the long-term.

Women who are able to overcome these obstacles may even find that they achieve better results than men.

Being engaged

Getting started is often the hardest part – investing can appear boring, numbers driven and dull. Before starting it’s a good idea to think carefully about some of the reasons you might want to invest. Having clearly defined goals, such as investing for school fees or because you’re planning for retirement, can give you an incentive to get started.

Our Life Planner tool can help you set targets by enabling you to see how your savings and investments could potentially perform in future. Remember that these projections are only indicators and should not be taken as a guarantee of how investments will perform. If you’re not sure where to invest, you should seek professional financial advice.

You’ll also need to work out how much you can afford invest and most importantly how much you could afford to lose. Understanding your approach to risk can help you work out what sort of investments to choose, and how to split your money between different investment types such as shares, bonds, cash, commodities, and property.

Investing doesn’t have to be complicated, but financial jargon can be off-putting and deter investors.

A good way to become engaged in investing is simply to start with a bit of research. Getting to grips with some of the investment terms you’re likely to come across is a good starting point.

You’ll be surprised at how many company names you recognise, buy products from or interact with on a daily basis. A good starting point to pique your interest is to review how these companies’ financial performance compares to their peers.

Our Research Centre contains all the tools and resources you'll need to help you make smarter investment decisions. You'll get access to in-depth company information, the latest market movements, as well as our advanced search function to help you find exactly what you need.

For example, you may choose to create a personal watchlist to track the performance of shares and other investments listed on the London Stock Exchange. This way, you can trial investing in the stock market through a virtual portfolio before investing.

If you’re unsure which investments to choose, consider taking professional financial advice.

The confidence to invest

According to a report from Barclays Wealth and Ledbury Research,3 women generally tend to be more risk averse than men.

Of course, some women may be more risk averse than men, but still have the confidence to invest in a low-risk investment portfolio, with the knowledge that markets may fall as well as rise, but over the long–term the hope is that the value of investments will beat returns from cash accounts.

Dr Peter Brooks, Head of Behavioural Finance at Barclays, said: “One way to control the fear of falling markets is to have a lower risk portfolio – or even to avoid risk all together. It is also important to point out that the result on risk tolerance is based on the average. We see females who are very comfortable with risky investments and we see males who are risk averse.”

Although stock market volatility can be unnerving, there are several steps investors can take to help boost their confidence. For example, you may choose to drip-feed small amounts into the stock market every month, making regular investments to benefit from what’s known as ‘pound cost averaging’. The idea is that you buy more shares when prices fall, and vice versa, which may help to smooth out stock market volatility over the long-term. However, beware that this strategy doesn’t always work and sometimes it can produce worse results than investing a lump sum. 

It’s important to remain focused on the long-term by investing for at least five years, but preferably longer, for the greatest potential gains, which will also help you avoid the temptation to panic and sell when markets are turbulent. 

Holding a broad spread of assets, which include cash, fixed-interest securities, property and equities can also help, as it means you’re not relying on one type of investment too heavily. The hope is that if one part of your portfolio doesn’t do so well, your other investments may fare better, making up any losses. 

It’s also worth noting that what you may see on the news most likely reflects the behavior of the stock market and not how a portfolio invested across a range asset classes will behave. Your reality may be very different from the perception you get from the news of how your investments are doing.

Remember though that all investments can fall as well as rise, and whatever steps you take to protect investments from stock market movements, you could get back less than you put in. Barclays Smart Investor service does not offer personal investment advice. If you’re unsure, seek independent advice.

Finding time for investing

Not having enough time is often cited by women as one of the reasons they don’t invest but investing needn’t take up hours of your time.

In fact, it’s often better not to tinker with your investments too much, as staying invested reduces the risk of making badly-timed decisions. Regular buying and selling will also incur trading costs which can eat into your returns.

Often it is time spent in the market rather than trying to time the market which is the key to successful investing, although there are no guarantees and you could still end up getting less than you put in.

However, committing to your investments for the long-term, known as buy-and-hold investing, means you stay invested throughout various market cycles, and hopefully don’t miss out on any of the best days.

Dr Peter Brooks said: “If you have the ability to invest for the long-term and have the ability to absorb losses, and have decided that investment is appropriate for you then the most important decision you can make is to get invested. After that, a lack of time may work to your advantage because it will help you stay invested and avoid costly mistakes from following market ups and downs too closely.

Remember, the value of investments can fall as well as rise and you could get back less than you invest. Seek independent advice if you’re unsure of this investment’s suitability for you.

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