The investing gender gap: Tips for beginners

The UAE has an 80% expat community, many of whom have come here to earn more than they would be able to in their home country. Both men and women should have more disposable income in a country with no income tax, so why are the women not doing anything with it?

Studies show that women are likely to keep their wealth in cash, whereas men invest into portfolios. Of course, investment comes with a risk, but cash savings are continuously eroded over time due to inflation. Investments are designed to grow.

At the time of writing, only 14% of Beehive’s investor database are women. Beehive’s marketing strategy is not gender specific, so external factors must be to play to create this unbalanced statistic. When it comes to paying bills and budgeting women are equally as confident as men, but with investing the confidence drops significantly.

To work out why women are investing less than men, Beehive got a panel of experienced female investors together on International Women’s Day 2020 to discuss the imbalance and encourage others. Here are their top tips:

  • Start investing early

The best weapon you have when investing is time – the earlier you start, the more you get. In addition to this, you can benefit from compounding. Compounding is the process of the exponential increase in value of an investment because you’re earning interest on your pre-earned interest. In essence, your interest earns interest, so the earlier you start earning interest, the more you’ll make in total.

  • Test the waters with small amounts of cash

Women are typically quite risk averse and can be scared of losing money. So, begin by investing small amounts to get an understanding of how it works without the risk of losing much. Beehive lets you start investing from just AED100. This brings us to our next point…

  • Don’t be deterred if you lose

Investments can go up and down. And we learn from experience. If you lose money on your investments, don’t let it put you off. Much research has taken place showing women to be better investors than men. Men get over-confident when managing a portfolio, and this mentality leads to over-trading, which can create a subpar performance over time. So, don’t panic, keep calm and carry on.

  • Spread your investments across multiple platforms

To minimize risk you should put your money in multiple places. This is called having a diversified portfolio and means if one investment is underperforming, you won’t lose all your money. For example, in the UAE you can invest your money with Beehive and benefit from the SME economy, and you can also invest through a portfolio with Sarwa. But don’t restrict yourself geographically either, make sure your money is invested in multiple countries to benefit from global economies. If you want to invest in property, don’t just stick to where you know – look at getting properties in multiple locations.

  • Talk about it!

There seems to be a taboo around talking about finances with female friends because it could be perceived as boastful. Men do not suffer from this same issue… Broach the subject with your friends and encourage each other. Word of mouth is the best marketing tool, and if your friends decide to invest in companies you have a common interest in, then it will become more exciting to talk about and you’ll learn off each other!

Thank you to our panelists:
Gavin Basma-Kwas, Investment Director, Beehive
Daryl Hulse, Wealth Associate, Sarwa
Karin Drane, Managing Director, Curveball Events and Talents
Lavi Chandra, Co-Founder, Leela’s Lunches

Beehive accepts no responsibility for any use that may be made of these comments and for any consequences that result. Any person acting on it does so entirely at their own risk. Beehive does not provide financial advice.

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