If you’re reading this, I’ll hazard a guess you’ve got a cash Isa. You’re not alone – 44% of all Brits have this tax-sheltered savings account. But only nine in one hundred British women have an investment Isa where the money goes into stocks or shares. The other 91 are massively missing out – to the tune of thousands of pounds. Well over £8,000* in the last five years, actually.
So why aren’t the girls going a shedload for shares? Lack of confidence because of lack of knowledge about the stock market, says Fidelity, an investment firm. They obviously have a vested interest in getting more clients on board but at least they’re making the effort to get to the heart of the problem. Ladies prefer cash. It’s easy to understand, there’s no horrible lurches up and down in value or any risk of losing it all completely. But is that ‘peace of mind’ really worth eight grand?
I’m just going to bust a few myths here.
1. Stocks and shares are too difficult to understand.
Sure there’s a load of jargon and way too many men in suits but it isn’t impossible. Once you’ve got your head around a few basic concepts and the language, it really isn’t as hard as you think. Our ultra-simple guide to first-time investing is here.
2. It’s a roller-coaster ride and too risky.
Yes, you could lose money. But, then again, you could make money too. There will be good economic times and bad ones but the longer you have to invest, the more chance you have of riding out the downturns.
3. My money is safe in cash.
Most interest rates for cash accounts are currently less than the ongoing increase in the cost of living (inflation). If you can’t keep up with or beat inflation, you are actually losing money in real terms.
4. There’s no point going in now, all the money’s been made.
I agree that we’ve been on an upswing for a while and people are confident about the economy and jobs. Hence share prices are high at the moment and can easily fall back. But you should be investing for the long term. Concentrate on the yearly dividends which shares pay out. These small amounts, if reinvested, really build up over time. And currently the average dividend from shares is well ahead of inflation.
5. Investing is only for rich people
You can start a regular savings plan from as little as £25 a month.
So come on ladies, butch up. Twice as many men as women invest in stocks and shares Isas and why should we let them have all the rewards? Right now you are losing money in cash. All women, not just SMMs, should at least consider starting (or diverting existing cash into) a long-term savings plan in the stock market.
Fidelity has a useful female- friendly investment website at https://www.fidelity.co.uk/investor/markets-insights/women-investing-b.page.
*An investment of £15,000 in the FTSE All Share index five years ago, you would now be left with £23,799. The same sum put in the average UK savings account over the same period would now be worth £15,122 which is £8,677 less.