A female’s guide to investing

Woman investing, women in finance

Article by John Castro, CEO of Investment Mastery

Women are often known for their softness, sensitivity, empathy, and caring nature, an image that doesn’t align with the ruthless, cutthroat image of a trader and investor, but in our journey of helping thousands of people learn how to successfully invest their money, we have often found that women make great investors.

Their quiet determination and careful weighing of the potential gain and risk have, in my experience, brought them some really great returns on investment.

Of course, I am generalising, but I do think that the number of female investors is increasing, and we shouldn’t be surprised to find more women taking control of their financial future and building new pillars of wealth.

My team and I champion inclusivity and think it’s great that women can start to break free of those silos that have typically held them back with just a little education. For some women who have successfully taken control of their finances, it can mean the difference between having the option to take an extended maternity leave, or reducing work hours to help with childcare. For some women who are renting, it can even help to build up a deposit to purchase a house. Having more money leads to more choice, allowing women to do whatever it is they want to, when they want it. By investing in your financial future, there is now much more scope for being truly financially independent.

Education

So, how can women embark on this journey of becoming financially free? Education is the key. No one learns to drive without lessons or becomes a doctor without extensive training. It is the same with trading and investing; a financial education is needed.

Set yourself a goal to find out about investment strategies for just 20 minutes to an hour a day, and in 6 months, you will be ready to start investing. Read books, join groups and follow people on social media who are already investing.

I would even suggest to invest in courses. Lots of us have paid for our professional education or some traditional college or university “certificate”, but we forget that untraditional education is the only thing that has ever made anyone rich.

Learn the best strategies for investments, and then take your time to test your theories. Only invest what you can afford, and never use debt to fund investments. We often teach our clients to use the money they would typically spend on their daily coffees or weekly takeaways and redirect it to investments. This way, your monthly outgoings haven’t changed, but your money is working for you, rather than you working for it.

Mindset

Although this is changing rapidly, in my experience, many women don’t believe they are worthy of financial independence. These feelings of not being “good enough” or self-doubt are often more prevalent in women. I often see many women will hide behind other reasons, such as a lack of knowledge or time, but these are often just excuses, and the real reason is self-doubt.

Knowledge can be gained, and time can be made for anything we want to prioritise, and so once we start to understand that these excuses aren’t the real reason for lack of action and that the self-limiting beliefs are the real reason, mindset can start to be changed.

Remember… What you tell yourself, is your truth. So start to tell yourself, its possible, and stop believing it’s not!

Investing emotionally vs strategically

Once you are educated on the best strategies to use and are in the right mindset, there are two ways to decide what to invest in. Emotionally or strategically. I suggest the latter.

You can either look to invest in companies that you have an affinity with – such as ones that hold the same values and ethos, or simply because you have an interest in the sector.

Investing in your passions has a benefit. We find that clients who invest in their passions spend more time reading and researching because they enjoy it, and their research is more thorough. Love the brand Dior, then why not own a slice of the company through shares? Enjoy eating out? Invest in your favourite restaurant brand and enjoy knowing that every time you go there, you are increasing that investment.

Just do not get emotionally attached to ANY company you invest in. Remember, it’s an investment, not a purchase.

Emotional attachment in trading and investing is dangerous because you might get in too early in a company just because you like it and enter at the wrong price. You also run the risk of holding on to them too long after you should have exited, and profits might turn to losses, whereas it is easier to sell the stock of a company you have no emotional connection with.

Digital currencies

Of course, it’s not just traditional investments where money can be made, there are also the newer digital currencies that can create wealth. Crypto, however, is much more volatile, and with the highs come the lows. Crypto investing is usually a shorter-term investment and is better for those that enjoy risk.

Top tips:

  1. If you have no knowledge of cryptocurrencies, a good place to start is the top 10 coins. Bitcoin and Ethereum are two solid bets, but ensure you do your research.
  2. Before you get started, set up a demo account where you can practice the strategies without risking any money. Test the strategies for a month or two to ensure you have perfected them and are happy with the results.
  3. Choose a particular day or two each month to invest in crypto, and on this day, look at the previous month’s value. If the value has dropped significantly, invest a predefined amount – say £100. In the following month, look at the value against the previous month and, if dropped again, purchase +25% more than last time. Once the coin starts to rise, you are then in profit.
  4. If the value has risen in the following month, do not invest more of these coins. Try another cryptocurrency and use the same strategies to invest. This will give you an overall portfolio with a low average entry price on everything you purchase, which will maximise profits over time.
  5. Crypto is much easier to get into than traditional investments. Just get an account, get a wallet, and track your assets. Remember that banks or governments do not control it; it’s controlled by everybody who invests in it. It is also inflation-proof, so now is a good time to start investing.

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