Australian women retire with around 50 per cent less savings in their superannuation, live on average four years longer and only make up 14 per cent of the share investing population.
But that’s changing: 51 per cent of people who plan to invest in the ASX in 2021 are women, and the surging interest is something 25-year-old friends and investors Maddie Guest and Sophie Dicker find thrilling.
The two financial services professionals host the new Equity Mates weekly money and investing podcast, You’re In Good Company.
They believe it’s critical that more young Australian women feel confident to begin their investing journey, and adding more female voices to conversations around investing is a big part of that.
The future is female, and we’re buying shares
Dicker and Guest both began investing in recent years.
Dicker entered the market about three years ago after some prompting from her partner, with her first investment in Aussie tech darling Afterpay.
Guest waited until last year to jump in, beginning her journey mere weeks before the March COVID-19 stock market crash.
Both have had varied experiences in the market, but they agree on one thing: the best thing that they did was simply to start.
“We sort of joked before that the easiest way to learn is just by starting, and once you start putting some money in - it doesn’t have to be much at all - and you watch it and you’re involved, then it’s so much easier to care and to understand what’s going on,” Guest told Yahoo Finance.
“Having a little bit of money in at that point and watching it during COVID, and being tested straight away about my style of investing… I think that helped to set up some good habits early on.”
However, the two also agree that while the easiest way to learn about investing is to start investing, the industry is still too full of jargon for novices to feel confident about putting their money in.
It’s a real catch-22, but it’s a problem that the podcast hosts also believe they can solve.
While they target young women who already have a solid financial foundation and decent money habits, their goal is to coach their listeners through the first stages of investing, introduce them to new strategies and themes and answer some of those furry questions that can act as stumbling blocks early on.
Offering up a young, female perspective here is critical, Dicker said.
“Finance has traditionally been a really male-dominated industry and technically it still is, but the thing is when you reflect on the conversations that you have around the dinner table or at the pub with your mates, a lot of these conversations can be influenced by your work and your experience,” Dicker said.
“So if we have had generations where women are underrepresented in the finance industry, then it’s only natural that we are going to be less comfortable having conversations about money and investing.”
How does Maddie invest?
Her investment strategy
Guest chooses to invest using a dollar-cost averaging strategy. Dollar-cost averaging is the process of making regular small investments over a period of time, rather than investing a lump sum in one go. One of the main appeals of dollar-cost averaging is that investors run a lower risk of investing large sums of money when the price of an asset is high.
The vast majority of Guest’s investments are exchange-traded funds (ETFs), which allow her to invest across a wide range of companies and achieve diversification that way.
Themes she’s watching
Guest is closely watching the emerging markets space.
“We know that throughout history, capital tends to flow into emerging markets right as we come out of a recession and the pandemic,” she said.
She said that while she wouldn’t choose to invest in one company in one emerging market, she’s watching several actively managed ETFs with exposure to emerging markets.
How does Sophie invest?
Her investment strategy
Dicker has a different approach, choosing mainly to invest in direct shares. She’s clear that neither approach is better than the other, it’s more a question of risk tolerance.
For example, Guest’s ETF strategy would be considered lower risk as she’s investing over a larger group of companies. That means that if one company crashes, her overall portfolio won’t be too badly dented.
For Dicker, she’s happy to take more of a risk and in exchange, potentially see greater returns.
Themes she’s watching
Dicker’s top theme is sustainability, noting it’s already one of the “biggest areas” where Generation Z is putting its money.
She’s keeping an eye on artificial intelligence, robotics and cloud computing.
“I think our economy and society is only going to be more connected by the internet… so companies that are in that space and that are contributing to society I think is a very exciting thing for the future.”
Take control of your money and learn to maximise it with the Women’s Money Movement! Join the club on LinkedIn and follow Yahoo Finance Australia on Facebook, Twitter and Instagram, and subscribe to the Women’s Money Movement newsletter.