Do women need different investment options?

Every product manufacturer often believes that he needs to treat the women folk differently. As a result, you have separate soaps, women credit cards and even cigarette makers tried it making different for women. Do women need different investment options too?

Are MIPs of mutual funds a safe bet?

Not really if you have the required risk appetite and income on your hand. For instance, a young lady employee without any financial responsibility can choose aggressive investment option like any other investor. Then why don't too many women venture into aggressive investment options like stock trading or commodity trading?

Most Read

Finance ToolbarFree 'Stock market burst within one or two months' It's time to reward shareholders: Mukesh 'Home loan rates unlikely to fall further' Mahindra Satyam in global pact with US firm It's discount season in jewellery mart Premier Auto's cheapest SUV Follow us on Twitter

Lack of knowledge?

One of the reasons could be the parental influence. Since small percentage of Indian population indulges in equity trading, not many women have exposure to equity in general.

The disconnect with the option tends to continue even after financial freedom as many take on products preferred by their parents. What makes matters tough is the fact that women hate to lose money and unfortunately, equity for many, is equivalent to losing money!

Remember the lessons learnt from the gloom

Perfect attitude:

It is common knowledge that equity loses its risk element when an investor thinks long term with the option. By and large, women are more focused with their money management and this makes them perfect investors for the equity market.

Whether it is SIP or a pension plan, investors need to have the discipline and it should be easier for lady investors keeping in mind their behavioural traits. So, women who are looking at building a corpus for long term can sign up for an SIP of 5-10 years in an equity fund just like their male counterparts.

What is best? SIP or lump sum

Allocation strategy:

Irrespective of the gender, a successful investment plan means allocation of funds into different class of instruments. The share of each asset differs according to the risk and age of the investor and that holds good even for women.

So, when you set out to invest, make sure to divide your money into long-term and short-term needs and choose the instruments accordingly. For instance, saving for an expenditure, which is likely to come up in the next 12 months can be done best by putting money into a debt fund or recurring deposit or it does not have any risk. On the other hand, if you are saving for a child's education, which is a decade away, look at other options like child insurance plan or SIP.

Non-risky options: Time for fresh guard

Think for yourself:

While single independent women are natural planners of their income with investments in their name, it is time for married and non-earners too to think of an independent source of income for themselves.

Every individual needs regular cash flow as long as they are alive and more so in old age. Hence have an investment in place, which provides regular source of income. It could be a monthly income plan or a pension plan. The task is easier for the salaried as they can sign up for a pension plan and start contributing to the same on a monthly basis.

Insure yourself:

It is time women took a serious note of insurance and cover themselves adequately. Often, we find that women's insurance cover does not extend beyond a few lakhs of rupees despite earning handsome income.

With women too getting into the habit of taking loans for creating assets such as property, it is logical to take adequate cover for taking care of liabilities over long term. Products such as term plans are cheap and it also makes sense to divide the life cover with your spouse as mortality charges are much lower for women.

Is equity trading bad for your financial health?

Be fair with your investments:

• SIPs should be easier for women to manage because of their long-term approach

• Life insurance cover is not merely for men. Take adequate cover in line with your responsibilities and income levels

• Go for independent source of income for post-retirement life

• Equity pays well in the long-term and they are ideal for fair sex with their long approach

Srikala Bhashyam is the Managing Partner of RS Consultants. She runs an investment-consulting firm in Bangalore to provide consultancy in the areas of financial planning and media. In the last 15 years, she has worked with top publications in different locations. The primary focus of all her columns is to simplify the nuisances of Finance, which has attained a new look over the years. Besides being a columnist, Srikala has also been closely associated with some of the prestigious book projects.

The author can be reached at srikala.bhashyam@gmail.com

The views expressed in the article are the author's and not of Sify.com.

SEARCH