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Becoming
a Knowledgeable Investor
How
much do you know about investing? Do you rely
on someone else to take care of your financial future?
Do you put off thinking about retirement planning, estate
planning and other financial matters because you have
too many other priorities? If
you do save and invest, are you saving enough and investing
wisely?
If you haven’t
taken charge of your financial future, consider this:
in every age group, more women than ever are living
alone (US Census, 2000). At some point in their
lives, most women will have to manage money on their own.
The worst time to learn
about financial planning is when there is a crisis—divorce,
death or other major change in your life situation.
Investing
philosophy
When women
manage their own money, they are often very good at it.
For example, a study by the National Association of Investors
Corporation showed that all-women’s
investment clubs achieved average annual returns of 32%
vs. 23% for all-men’s clubs!1 (Past
performance is not a guarantee of future results.)
Women are
potentially good investors because:
• Women ask questions.
Women tend to be systematic about investigating  investment
options and some women aren’t afraid to
admit they don’t understand. There does
seem to be a willingness on the part of women to ask questions
before they take action. For example, one study showed
that women spent 40% more
time researching their investments than men.1
•
Women tend to stay the course.
Investment success means riding the ups and downs of the
market and women seem likely to do so. For example, another
study found that men traded stocks in their accounts 45%
more than women.1
Taking
the first steps
 If
you’ve never managed your money, now is a good time
to start. There are hundreds of good books and
websites on the fundamentals of investing (some
written specifically for women). Even married women whose
husbands do all the family investing should at least be
aware of what those investments are. If
you’re married, make sure you know as much about
your family’s finances as if you were managing the
money yourself —because you may have to someday.
Finding
a trusted financial professional can be a great help. Here
are some questions you should be able to answer with the
help of a financial professional or on your own.
• How
much money do you need to save for short-time goals
(emergency funds, new car, etc.)? How should
that money be invested?
• How much do you need to invest for long term
goals (college for kids, retirement)? How much should
you add to your savings each year? What
kinds of investments will help you work toward your
goals? What is the potential risk and potential return
of these investments?
• How often should your investment mix
be examined? When should you make changes?
• Should you have a retirement plan separate
from your husband’s?
• What would the consequences be in
the event of a divorce or death of the primary earner?
Do you have an estate plan? Is it up to date?
• Do you have provisions
for the financial care of dependents (children, aging
relatives) in the event something should happen to you
or your partner?
Like any skill,
successful financial planning takes a willingness to learn
and some experience. After all, you didn’t become
an experienced driver overnight, either. Just
as with learning to drive, it may take some time to get
the hang of managing your finances. But
learning what your financial goals are and how to reach
them, whether on your own or with a professional, is too
important a life skill to put off.
1 “Are women
better investors than men,” BBC News, 18 May 2001.
Becoming a Knowledgeable Investor
GE21622
(10/03) (Exp. 10/05)
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 Lee
Alcorn offers securities through AXA Advisors,
LLC (member NASD, SIPC) and offers annuity and insurance products through
an insurance brokerage affiliate, AXA Network, LLC and its subsidiaries.
Alcorn is licensed to sell insurance in the following states: NC,FL; is
registered to offer securities in the following states: NC, FL and is
registered to offer investment advisory services in NC, FL.
AXA Advisors, LLC does
not provide legal or tax advice. Please consult your tax or legal advisor
regarding your individual situation. |
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