Three ways in which women investors are different from men

Our Indian market has several remarkable women challenging stereotypes and driving success. Take, for instance, Madhabi Puri Buch's appointment as Chairperson of SEBI, Radhika Gupta's value-driven investment philosophy at Edelweiss Asset Management, and Falguni Nayar's entrepreneurial spirit that fuelled Nykaa's successful IPO, which demonstrate the impact women are making in a traditionally male-dominated sector.

This growing influence is reflected in the numbers. With 38% of women's investment portfolios now diversified, compared to 16% just two years ago, the majority of women are investing in the stock market.

Contrary to the misconception that trading is solely for men, women are becoming more prominent in the Indian stock market. According to Fidelity's 2023 global survey, 60% of women are investing in the stock market and 68% are saving for retirement. Younger women, specifically those belonging to Generation Z and millennials, are leading the charge in investing, with 71% and 63% participation rates, respectively.

As a stock market analyst and CA, I am often asked questions about how women differ from men in the financial world. I feel women's natural strength is saving, which creates a higher potential for investing. However, saving alone is not enough to beat inflation, especially in the long run. Investing helps your money grow and potentially outpace inflation, allowing you to achieve your financial goals.

Women often excel in investment due to a variety of factors. They tend to be better at controlling their emotions and avoiding impulsive choices driven by short-term market changes.

While women are making strides in investing, their role in trading remains smaller. Men accounted for more than 84% of traders in the equity F&O segment in both FY21 and FY22, dominating the market. The good news is that, despite their 16% participation, their share in the profit makers accounted for 28%.

However, there is a reason why women still lack behind. There is a perception that trading is less suitable for women. Many women struggle with self-doubt and believe that men are better equipped to handle financial matters and invest in the stock market. Nevertheless, it is not about gender. We need to encourage more women to take an active role in trading and investing. We need to promote financial literacy programs specifically tailored for women, create a more inclusive environment in financial institutions, actively work to eliminate biases in how women are treated by financial advisors, provide mentorship and networking opportunities and highlight the achievements of women in trading and investing.

Overall, the key element of trading and investing is developing confidence through education, research, and learning, and ‘if you are not well-informed, you should not trade.’

Men, too, have a crucial role to play. As partners, they must support their spouses, involve them in financial decisions, and encourage active participation in trading by helping them set financial goals.

Ultimately, the financial world is open to everyone. Women should not let their gender hold them back from exploring trading. Trading in the financial markets can allow them to capitalize on their abilities to react calmly, prepare thoroughly, and take a disciplined, long-term approach, which will make them well suited for both long-term investing and short-term trading.

The author, Trivesh D is Chief Operating Officer at Tradejini

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.