Posted on 24/11/2020
When it comes to investing your money, Opel Nelson, Associate Financial Planner at Statewide Super, says that women often face a “confidence gap” which can have a big impact on their financial futures.
“One of the issues that we are often faced with is a lack of confidence, known as the confidence gap,” she said.
“This confidence gap can impact us in many ways, but most notably, how we approach employment opportunities, and how we choose to invest.”
To combat this, Opel has broken down the key investment strategies women should consider when making long-term financial decisions.
“Investments are broken into two categories: firstly we have growth assets, including shares and property, where the return is generated by both the increase of value in the asset and income it provides over time,” she said.
“Secondly, we have defensive assets, such as cash and bonds. With a defensive asset, the returns are generated primarily through income, such as bank interest.
“Growth assets tend to provide higher returns over the long term, but the returns can be volatile and fluctuate largely over short periods of time.”
In contrast, Opel explains that while defensive assets generally tend to be steadier, the returns are often lower – and while these investments may feel safer over a short period, they may not generate long-term wealth.
“Generally, women tend to be more conservative with investing, and we tend to hold a larger proportion of our investments in defensive assets, such as cash and bonds – often feeling less confident when it comes to making investment decisions, which can sometimes hold us back,” Opel said.
“We can really see the impact of this when we look at how these different assets perform over time, with growth assets generally outperforming defensive assets.”
To find out more about how you can take control of your investments, contact Statewide Super today to speak with one of our financial planners.