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How Can Women Start Their Investment Journey – Forbes

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On a global average, women earn 23% less than men for the same work. Suffice to say, gender pay gap challenges continue to prevail, and until women and men reach parity, it is even more important for women to take on the mantle of investing their hard-earned money smartly. The question on the minds of women often is — when is a good time to begin investing?

If you are someone who feels unsure about investing, here’s advice to help you, as a woman, become self-sufficient and own the narrative of your finances.

Why Should Women Start Investing?

The logical justification for why women should invest is simply because men can, and do. But outside of stating the obvious, investments are a great way for women to grow their income.

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If a woman is working, for example, she can apportion some of her disposal income each month and put that in markets. This could help her save for many things: a vacation, a degree, a vehicle, or even have extra money saved for a rainy day.

But a woman need not be working to invest in markets. Perhaps you’re a woman who stays at home to take care of her family. Investing in markets is a strong mechanism to earn money for long-term goals your family may have: buying a home or saving for your child’s education fees.

When Should Women Start Investing?

At what age should a woman start investing? Is it when you land your first job? Perhaps it is when you first start making a bit of money? Could it be after a promotion?

The answer, fortunately, is not complex and summarized perfectly by the classic proverb, “The best time to plant a tree was 20 years ago. The second best time is now.” Truth be told, if women were influenced to financially plan their lives earlier, there is no doubt that not only would they be more empowered today but would also have more representation in business environments. While many women are more than fortunate to have found high-growth investment tools when they did, they will tell you that they would be much further ahead if they had pulled the trigger earlier.

With that said, not all forms of investment are indeed ideal for someone starting new. When it comes to investing, some routes are far less challenging, and frankly, less cumbersome than others. After all, who wants unnecessary hassle when it can be easily avoided by just selecting more suitable investments over others?

What Kind of Investments Work Better for Women And Why?

When you first begin investing, do so in a way that helps you get the best RoI (return on investment) and bang for your buck. While we are all exceptionally busy, women sometimes have the added responsibility of co-managing work with responsibilities at home. This could make it challenging for them to review their portfolio on a daily or weekly basis.

On the other hand, some women may find that they want to manage their portfolio more actively. No two investment portfolios are the same and that’s why it’s important to be vigilant of how much time you can commit, which in turn can influence your investment options

The following investment options can be ideal for women:

Mutual funds 

Mutual funds are a good option for any kind of investor, beginner or seasoned. As a woman, you need an instrument that allows you to allocate your funds efficiently based on your goals. If you are a new investor, you can simply begin with a systematic investment plan (SIP). It allows you to invest a certain amount of savings every month, wherein the amount will be auto-debited from your account every month, hence helping you remain committed to your investment strategy.

Exchange traded funds (ETFs)

Gone are the days when investing in stock markets required rigorous research and was essentially beyond the reach of the common woman. An ETF is primarily a basket of securities that considers the universe of assets — be it equity, debt, stocks, bonds, commodities, or currencies. You may buy a share of that basket, just like buying shares of a company. ETFs are traded on the stock exchange and offer the ease of stock trading along with the diversification benefits of mutual funds.

Stocks

Stocks, otherwise known as equities, represent fractional ownership of a company. When you purchase a share of a company it means you own a small piece of that company. Some of the biggest brands today allow people to buy and sell their stocks. This is typically considered a more risky asset class because of the volatility that is sometimes associated with stock performance. Why is this the case?

The price per share of a company is linked to many factors: the balance sheet of the company, its leadership and so on. However, stocks also have the potential to yield exceptional returns. Because of how much their price can oscillate in a given day, investments in this asset class may not be suitable for every woman. They typically require more vigilance and active rebalancing, which can take some time.

U.S. Equities

Diversification is crucial in any woman’s portfolio. Remember to never put all your eggs in one basket. Investments in foreign equities can provide diversification benefits in one’s portfolio, along with the opportunity to hedge the rupee. Rupee hedging is important to consider because you may need extra funds to spend when hosting a party in Europe.

Thanks to India’s liberalized remittance scheme (LRS), women can invest in U.S. equities abroad from the comfort of their homes in India. And if direct investments into U.S. stocks is not something you are willing to consider, many asset management companies (AMCs) offer feeder funds.

Whether you are a man or a woman, it is important to remember that investments can be age weighted. What does this mean exactly? As we age, it is likely that our risk appetite will oscillate.

If you are a young working woman, for example, you could consider allocating your portfolio to international equity, international ETFs, and domestic stocks. While these asset classes typically carry more risk than an fixed deposit (FD), any short-term losses you incur have the possibility to be recouped because you have age on your side.

Similarly, as you age and start to think about retirement it is possible that you may want to take on less risk now that you know a regular stream of income from a job will not be guaranteed. Capital protection becomes key. A combination of FDs, bluechip names in the equity segment, and short-term to medium term bonds could be a wiser choice in this scenario.

In other words, it’s important to remember that not one size fits all and that any investment should be matched to your goals, income, and risk. Women should not be dissuaded from investing in any asset class because it seems scary, or difficult. Rather they should make an informed decision.

Investment Mistakes Women Must Watch Out For

While women venture into spaces that men have long dominated, it is worthwhile to examine some common practices of the past that may be mistakes of the present.

Extreme risk aversion

Women are known to be much more patient investors and better risk managers than men. However, investing too conservatively could also hurt your long-term performance, therefore losing out on comparatively and significantly higher returns.

Letting your partner manage your investments

Many Indian women continue to leave investment decisions on their partners, putting them at a massive disadvantage of being unaware of family assets or investments. If you want to be truly independent, you must have an investment portfolio of your own.

Going overboard with gold

Gold has been one of the more sought-after investment options for Indian women for over decades. However, women should avoid going overboard with buying gold and try to explore other investment opportunities to diversify their portfolios. This will also help you focus on financial assets instead of only physical assets.

Keeping too much in bank accounts or fixed deposits

Another favourite investment tool of women in India is either a saving account or best case scenario, fixed deposits. Storing money beyond a limit in these does not work considering their low interest rates. That money may not even beat inflation, resulting in negative growth. Hence, it is best to use savings accounts or fixed deposits to maintain some liquidity and contingency funds, while the rest could be invested in growth funds.

I’m Ready to Start, What’s Next?

Offline mediums

If you are someone who feels more comfortable with an in person interaction than find a local investment advisor, or a trusted broker through your network. Make sure you assess their track record of success, which involves evaluating how large their client base is. These are the people who can help you set up your investment account. Keep in mind, there is a thorough know your client (KYC) process which will involve verifying your identity, address, and bank account details. These are all measures taken to safeguard your investment account. 

Online mediums

An increasingly more popular option is to invest online. Fintech apps provide a seamless mechanism for you to download them, or go on the web, and open an investment account. The KYC process is entirely online, and can take anywhere from seven to 10 minutes depending on the app you are using. Some of these apps provide an option for you to connect with an advisor, whereas others follow a do it yourself model. The convenience of doing investments online is that you can typically track your holds straight from your smartphone and evaluate your performance more regularly. 

Whichever route you decide to take, make sure you thoroughly vett the in person resource as well as the fintech app provider. If they are providing you advice of any kind they should be licensed to do so.

Bottom Line

Investing could feel like a bit of work initially, but once you see your money grow, there will be no going back. Fortunately, there is plenty of information available out there to help you get started on your investing journey. 

As a woman, you hold the power to patiently, smartly, and efficiently invest your money, which will not only help you reach your financial goals but also lead you down a path of growth and opportunities. Whenever faced with questions regarding how to invest, please remember that one of the best things you can do is ask for help. There are no stupid questions, and the doubts you have today were once, in all probability, the same as others had when they were first starting out. What matters is starting.

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Amazon Adds $2.75 Billion To Anthropic Investment, Sora Goes To Hollywood – Forbes

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Amazon invests $2.75 billion in Anthropic. This brings Amazon’s investment to $4 billion, as it follows its previous investment of $1.25 billion, which gave the company the option to invest the additional funds. This comes as Anthropic’s new Claude-3 chatbot outperforms ChatGPT- 4 in recent tests. Amazon has unique insight into Anthropic’s performance as it is one of the suite of AI models offered by AWS, which include most of Claude’s competitors.

Sora Goes To Hollywood. Everyone is reacting to a Bloomberg report that OpenAI will soon be meeting with studios and other Hollywood stakeholders to demonstrate the capabilities of the text-to-video generator and explore partnerships. OpenAI says unnamed “A list” directors are already using it.

Based in Toronto, shy kids are a multimedia production company who utilized Sora for the above short film about a man “who is literally filled with hot air.” His head, as you can see, is a yellow balloon. “We now have the ability to expand on stories we once thought impossible,” shares the trio made up of Walter Woodman, Sidney Leeder and Patrick Cederberg. Walter, who directed Air Head, said as great as Sora is at generating things that appear real, what excites us is its ability to make things that are totally surreal.

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Neuralink Shows Paralyzed Patient Playing Chess on a PC. Elon Musk’s brain-computer interface company shared a video of its first human patient, Noland Arbaugh, playing chess and Civilization VI using their brain implant. Arbaugh, who is paralyzed below the shoulders, described the experience as “just stare somewhere on the screen” to move the cursor. While some experts see this as a promising step, others emphasize that it’s still early days and the technology has limitations. Arbaugh acknowledged that there’s still work to be done, but the implant has already changed his life.

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Illuvium Labs Raises an additional $12 million for NFT Gaming Universe. Following an extensive three-and-a-half-year development journey and $60 million in funding, Illuvium Labs is on the cusp of unveiling its interoperable gaming universe. It will feature three interconnected titles designed to utilize the same NFTs seamlessly across all games, promising a first-of-its-kind experience. The influx of $12 million in Series A funding from esteemed firms like King River Capital, Arrington and Animoca will be allocated to developing new gaming titles within the Illuvium ecosystem.

Databricks’ DBRX claims the crown as best open-source LLM. It’s a list that includes Meta’s Llama 2 and Mistral’s Mixtral. Leading companies like OpenAI, Google, and Anthropic sell, or rent, their proprietary private models to enterprises and subscribers. DBRX was produced for just $10 million, orders of magnitude less than its competitors. On Monday, Wired reported that the company showed data proving its AI model’s reading comprehension, answers to general knowledge questions, and coding is superior to other open-source models that can be downloaded from Hugging Face and modified by users.

Shiba-Inu Metaverse leader steps down amid dispute over IP. Marcie Jastrow, the well-regarded Hollywood executive who led Technicolor’s XR efforts, has left the company. This led the company’s legions, known as the Shib Army, to speculate about malfeasance, which is easy to do, because Jastrow is the only person involved who is not anonymous, including Ship’s charismatic leader Shytoshi Kusama.

This live football experience was built by Immersiv.io to showcase how AR can transform the live sports broadcast and fan experience using the Apple Vision Pro. Immersiv.io worked with the Bundesliga (the German Football League) on the production. In a post on X, the company said. “This is a 3D reproduction of the live game integrating TRACAB Gen 6 live skeletal data of all players and the ball, complemented with real-time insights, offering the ultimate live tactical perspective of the game.”

SXSW 2024: XR That Makes You Go Wow. The XR competition was won by an AI experience, The Golden Key. This is the second year in a row that an XR experience did not take the immersive festival’s grand prize.

The second annual AI Film Festival is coming to Los Angeles on May 1, and New York May 9. Seats are limited, request to attend at http://aiff.com

This column, once called “This Week in XR,” is also a podcast hosted by author Charlie Fink, and Ted Schilowitz, former studio executive and co-founder of Red Camera, and Rony Abovitz, founder of Magic Leap. This week our guest is Liz Hyman, CEO of the XR Association. We can be found on Spotify, iTunes, and YouTube.

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Where Will Virtual Reality Take Us? (Jaron Lanier/New Yorker)

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FP Answers: What is a 'behavioural edge' in investing and how does it affect returns? – Financial Post

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Temperament is the unsung hero of investing success

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By Julie Cazzin with Felix Narhi

Q: What is a “behavioural edge” in investing? How does it potentially enhance returns? How can an investor develop it? — Giovanni

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FP Answers: Giovanni, the term behavioural edge is just another way of saying “temperament,” which refers to the habitual way a person behaves in each situation. For example, one person may be easygoing and relaxed while another is more likely to be impatient and assertive.

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Temperament is the unsung hero of investing success. Gaining insight about our innate emotional temperament and learning how to work with it gives investors an edge.

The common misconception is that you need a high level of intelligence to be a successful investor. No doubt, that can be helpful, but based on many years in the industry, I’ve seen it is not always the most important differentiator.

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Once someone has at least an average level of intelligence, it is temperament that often provides the investing edge in leading to better returns over the long term. “Investing is not a business where the guy with the 160 IQ beats the guy with the 130 IQ,” famed investor Warren Buffett has pointed out.

Having the right temperament can potentially enhance investment returns in several ways. An investor who is very reactive to external events is likely to fare poorly over the long term because, quite simply, the world is full of uncertainty and always will be. Markets are highly reactive, abetted by algorithmic trading and automatic rebalancing by exchange-traded funds. Individual investors should not be.

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Research shows that investors who trade frequently or try to time the market underperform. On the other hand, those investors who can remain calm and patient throughout market cycles do better because markets historically trend upwards. Hands down, being calm, cool and collected is the right temperament for an investor to have.

The concept of “homo economicus” — or economic man — describes a hypothetical person who consistently makes rational decisions. In real life, our decisions are coloured by our formative experiences, moods, external circumstances, what we ate for lunch and a host of other factors. These influences drive our behaviours, but they often operate below conscious awareness (even artificial-intelligence apps “hallucinate”).

Given that behaviour is some combination of cognitive and emotional inputs, an investor can create an edge by developing a disciplined investment process that overrides temperament, especially during highly volatile periods.

The term “active patience” means being clear about your investment principles and what you are looking for, and practicing active patience until the right opportunity arises.

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In contrast, regular patience is making an investment decision and sticking with it no matter what, even if it was the wrong decision. The latter approach is unlikely to bring financial success, which is the major goal of investing.

Active patience is what Buffett would call the “fat pitch,” which occurs when the market (occasionally) presents a very attractive opportunity. It is easy to spot a great opportunity and take full advantage of it when an investor has clear principles on what they are looking for.

Can we change our temperament? Recent studies show that personality traits and moods are subject to change, sometimes within the hour, so temperament may not be as fixed as we’ve been led to believe.

Becoming a better investor starts with self-knowledge — and lots of practice. The behavioural traits associated with good investment outcomes are patience, discipline, emotional control and risk awareness. It so happens, these qualities lead to good life outcomes, too. A calm temperament is the bedrock of making sound investment decisions.

Every investor must determine for themselves how to achieve greater equanimity and there is no shortage of books, videos and TikTok tutorials on that evergreen topic. I would also add the importance of staying humble.

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In investing, as in life, the learning never stops. Staying open to new information and having the courage to challenge our own and others’ beliefs and habitual behaviours are the keys to future success.

Felix Narhi is chief investment officer and portfolio manager at PenderFund Capital Management Ltd.

Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here.

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Lenders Rally After India’s Central Bank Eases Investment Curbs – BNN Bloomberg

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(Bloomberg) — Indian banks and shadow lenders rose Thursday after the country’s central bank eased capital requirements for a unique type of investment, a move that may free up more funds for loans.

The gains came after the Reserve Bank of India issued Wednesday modified rules on lenders’ required provisions for exposure to alternative investment funds, or AIFs, that invest in the lenders’ borrowers. Under the new policy, a lender needs to set aside capital only for the amount the AIF invested in the debtor company, and not the entire investment of the lender in the AIF.

Shares of Piramal Enterprises Ltd., which reported among the biggest provisions for such investments, closed 1% higher after rising as much as 6% during the day. A gauge of financial services firms climbed 1%, the most since March 1.

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Lenders led the rally in the broader market, with the NSE Nifty 50 Index registering its best day since beginning of the month.

The RBI’s softening stance came after industry players raised concerns over clarity and uniformity after it announced in December restrictions on lenders’ exposure to AIFs that hold stakes in their borrowers. The latest move will likely help firms including Piramal, HDFC Bank Ltd. and IIFL Finance Ltd. reverse some of their relevant provisions made previously, according to analysts at Citigroup Inc. and Jefferies Financial Group Inc.

Read more: India’s Crackdown on Financial Risks Puts Industry on Watch

“Select private banks and NBFCs like Piramal had provided for their entire AIF exposure during 3Q and could see some write-backs in 4Q if they decide to reverse the excess provision,” Jefferies analyst Bhaskar Basu wrote in a note.

Regulators introduced a flurry of new rules last year to prevent a buildup of financial stress at a time when India’s economy remained resilient in the face of rising interest rates, slowing global growth and unabated geopolitical tensions.

©2024 Bloomberg L.P.

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