- Date : 16/09/2021
- Read: 3 mins
Women's investment preferences are changing – and how!
It is common knowledge that women are more empowered and financially independent these days. They are now also becoming more confident in their investment choices, as apparent from a recent survey conducted by investment platform Groww earlier this year.
About four-fifths of the women surveyed chose to invest in mutual funds and 60% wished to invest in equity stocks. Paradoxically, this flies in the face of an earlier study conducted by Agarwal, Jain, & Goel in 2020, which noted that both working and non-working women invested predominantly in fixed deposits, followed by PPF, insurance policies, and post office schemes.
The Groww survey included 28,000 respondents and intended to evaluate the investment habits of women, their financial goals, and their approach to wealth creation. It made the significant observation that financial decisions were being made independently by women, which was not the case earlier. About 60% of the women in the age group of 18-25 indicated that they took their own financial decisions.
Women in the past have always put the needs of their family and others ahead of their own. So it was encouraging to see that over 50% of respondents put their personal goals ahead of other priorities, including supporting family, travel, early retirement, higher studies etc. Discouragingly, only 11% wanted to save on taxes, so there is still some scope for increasing awareness about tax-saving avenues and their importance.
How much do women invest?
From the survey, it can be gathered that roughly 44% of the respondents invested more than 20% of their income. A whopping 56% continued to invest less than 10%, which needs to be addressed by creating better financial literacy and awareness. This can enhance women’s understanding of the importance of investing their income with a view to achieving their goals.
The survey also made a very important and interesting observation that despite women’s goals changing with age, the top financial goal pertained to family. Irrespective of the age group, more than 40% of respondents rated family goals as a priority. There was a spike in the 25–35 age group, with 21% of respondents opting for retirement planning and placing it as the second most important financial goal.
One in every two women discussed finance and investment-related aspects with their family and social circle, but only 48% consumed financial content online. Nearly half of the respondents thought they lacked the required knowledge to invest, and 32% did not have enough funds to invest.
In the same report, it was mentioned that 25% of the women invested in gold while 13% chose to invest in real estate. Only 9% opted for pension-oriented schemes. So, the most preferred investment for women – especially the younger lot – would be equity stocks and mutual funds, followed by other investment instruments.
Undoubtedly, there has been a paradigm shift in the way women invest. However, there is a need for enhanced awareness of the importance of tax saving and setting aside at least 25% of one’s income for investments. Although women increasingly participate in financial decision-making today, a boost in confidence levels is critical to effect a decisive change in their investment attitudes.