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42% of women investors got started during the pandemic, survey shows

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Some women have seen a silver lining in the aftermath of the pandemic: They are now able to invest. 

A recent survey by social investing app found that only 42 percent of female current investors have taken the plunge in either 2020 or 2021. eToro. Fidelity investments separate research shows that 50% of the women have expressed an interest in investing after the pandemic.

Callie Cox (U.S. analyst, eToro) stated that “people had more time to understand what investing is.” “We were all talking about it … so this helped women feel more comfortable to step in and invest.”

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A general rule of thumb was that women suffered the most from job losses and difficulties in finding child care. Cox suggested that their financial losses may have caused them to be more focused on money.

Cox stated that they were “in a tight spot and had to get control of their finances.”

Just half of the women who participated in the survey intend to keep their investments for at least six years. Fidelity also found that 67% of women invest beyond their retirement savings now, up from 44%, in 2018. 

Although investing is a great way to reach your financial goals and help you save money, it’s also important to look at the larger picture. 

Haley Tolitsky is a Certified Financial Planner at Cooke Capital, Wilmington, North Carolina. Consider your financial goals and your reasons for putting money where your money is.

Stocks and volatile assets can present a greater risk than investing in them for shorter-term goals. This is especially true if you don’t plan to need it for decades (e.g. retirement). In the event that you need the money in market declines, your stock holdings could be sold at loss or depressed prices. 

Tolitsky stated that the shorter your investment timeframe, the more conservative and prudent you should be. If you are investing less than 10 year, it is unlikely that you will want to invest 100% in equity.

It may be a good idea to invest some money in bonds, or assets with lower volatility, she explained. A diversified portfolio is better than a concentrated one, like a stock.

You also need to know your tolerance for risk. This is generally the time you have to save the money, as well as the ability to tolerate volatility in stock markets.

“The S&P 500 index’s annualized return is about 8% to 9%, but that’s over a long time horizon, not a few years,” Tolitsky said. Ask yourself, “Can you sleep peacefully at night knowing that your money fluctuates?” If you don’t know the answer, then it is time to get rid of risky investments.

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