The ‘Beauty’ Of Money

By M H Ahssan

Why should women be conservative in investment planning? HNN explores the options at your end to make the most of the market.

Investment traditionally has been a man’s world. It’s not that women are not permitted, but traditionally it has been like that. The entire system of markets and investment mechanisms has been developed by men; with women largely remaining at the periphery of these systems. While women do participate in investing, men far outweigh them in the number and volume of investments. Women make up roughly half of the India’s population but their presence among active investing population is negligible in the country.

Financial planning is becoming imperative for women now as an increasing number of them especially in urban centres have regular jobs and careers. They now need to plan for critical life stages of education, work, marriage, maternity and retirement. For women, one of the major steps towards empowerment is achieving financial security and independence through gaining control on investing decisions.

The financial world is gradually waking up to the reality that increasingly that the ‘better half’ now has money in her hands that is waiting to be invested. The recent bull market has helped in accelerating this change process. An unprecedented increase in women participants was seen in hey days of the rally. We saw working women, college girls and even housewives getting their first exposure to capital markets. While most restricted themselves to trading on small bets, some became involved in serious investing.

While the conventional tools of investing prevail, marketers of financial products are now increasingly designing products targeted at the fairer sex. Be it insurance policies or saving bank accounts, financial companies are now creating women-centric products to tap a huge market, which has not yet been justifiably penetrated and serviced. For instance, LIC launched Jeevan Bharati, an insurance policy exclusively for women first in 2003. Last year, it launched Jeeven Bharati – I, an updated version of the earlier policy. Most banks today cater to women customers through specially designed products like special bank accounts, saving schemes etc. Who knows we will soon have mutual funds especially designed for women just as we have funds targeted at senior citizens or children.

A woman investor, most of the times invest in safe investments like gold jewellery, fixed deposits etc. Investments under mutual funds or ELSS schemes are done primarily with an objective of tax planning. Very few women would go ahead and try their hands at investing in exotic products like derivatives, interest rate swaps, arbitrage products etc.

Interestingly, the styles of investing differ between the two genders. Tradition and science both have testified that women are more risk averse than men. They are more conservative and less likely to take business risks. Budgeting comes naturally to them by virtue of handling household expenditures. Investment decisions also differ between the two genders. Many times women know less of the various investment options available, and hence are less confident about the decisions they take about their investments.

If you are a woman reading this, be prepared to get more involved in the investment decision-making process. Financial decisions are no longer a man’s domain. Knowledge about various financial products is freely available - online as well as offline. Relationship managers, some of them being women, are more than happy to service women customers. Thanks to their discipline, women as a category of investors are better placed to make money in the current markets than their male counterparts.

And there is no dearth of pampering on this count. Marketers of financial products are aggressively wooing the new generation woman. With increase in working and independent women, the marketers of investment products are coming around to address the changing gender roles in the world of investing. Many micro financial institutions cater to women’s financial needs and offer special financial assistance. Customised products, women-specific tax concessions, communication and counseling are being rolled out.

In the current difficult times of financial uncertainty, it is time for women to be ready to take the burden of any contingencies like job loss, pay cut etc. rather than be a helpless witness to the unfortunate turn of events. While she performs a balancing act between career, home and family, a woman today also has to add financial investing into her ‘things to do’ list. And women’s day seems quite appropriate to make this promise to yourself to financially empower yourself, thereby empowering your family too.

INVESTMENT OPTIONS
- Investment strategies differ between the two genders
- Financial planning is no longer a man’s domain
- Most banks today cater to women customers through specially designed products like bank accounts, saving schemes etc.
- Many micro financial institutions cater to women's financial needs and offer special financial assistance
- Customised products, womenspecific tax concessions, communication and counselling are being rolled out