Empowering Change: The Growth of Women's Confidence in Financial Matters

In recent times, a notable shift has occurred as women's self-assuredness in financial dealings is on the rise. A survey of 7,500 savers and investors has shown that 44% of respondents associate the word 'confident' with an investor, indicating a growing sense of financial empowerment among women. This research, compiled in the Hargreaves Lansdown Financially Fearless report, signals a transformation in the way women engage with their investments.

The Maternal Influence

Motherly wisdom seems to be at the core of this change, with many women crediting their mothers for shaping their financial outlook. Indeed, a significant portion of women prefer to heed financial advice from their mothers rather than their fathers. Sarah Coles, a personal finance expert, acknowledges mothers as financial heroes who provide valuable advice and serve as excellent role models for their daughters.

Understanding Risk and Investment

Despite a common lack of confidence in making investment decisions, women actually possess a grounded understanding of investment basics. The survey findings indicated that a significant majority of women understand that investments can fluctuate, come with risks, and that higher returns typically mean higher risks. Additionally, many are familiar with financial instruments such as funds, demonstrating a solid foundation of investment knowledge.

Sarah Coles points out the discrepancy between women's perceived lack of knowledge and the reality of their understanding. This suggests that women might hold themselves to a higher standard of expertise before stepping into investing, compared to men who might be more inclined to learn through experience.

Investment Strategies

Adopting a cautious approach, many women are beginning their investment journey by committing modest amounts of money and learning progressively. Furthermore, about one third of women investors regularly allocate money to investment plans, a strategic move to build savings and mitigate timing issues in market pricing. Women tend to invest for the long haul, with nearly half maintaining their investments for a minimum of five years, capitalizing on compound growth and market fluctuations.

Research also found that women often diversify their risks by investing in funds from the outset. They utilize both actively managed funds and index-tracking funds and are inclined to seek expert financial advice and opinions before making investment choices.

Gender Comparisons in Investment

Past research by Hargreaves Lansdown has indicated that women's investments generally outperform those of men. Men's averages suffer due to higher risks that sometimes lead to significant losses, while women's more balanced strategies mean they are less likely to face dramatic setbacks. Women also recognize their influential role in shaping their children's financial futures, aspiring to be strong investment role models for their families.

confidence, investment, growth