Savvy Investment Advice for Women

By: Hélène Gagné

Boomer women are the first generation to retire with their own financial assets! For women of all ages, it is important to understand that financial planning and investing bring specific challenges.

Many female professionals and business owners are already succeeding in business, buying a home, building investment portfolios and contributing to RRSPs well before they find a life partner. Women should also keep in mind that, historically, they live longer than men and require more funds over their lifetime. Incredibly, 85% of today’s centenarians are women and you don’t want to be worrying in your “golden years” about money.

So, what causes some women to fail to plan (and thus, plan to fail)? Common barriers to financial progress among many women, in my experience, are a lack of time, lack of interest and a real fear of losing everything. Sound familiar? Well, most women face the same obstacles when it comes to investing and financial planning.

An independent advisor can help you develop a customized plan that will become your own “financial GPS.” From your working years well into retirement, you will go through three life stages— discovery (that’s when you are in your early 40s and believe you have plenty of time to start saving), transition (when you are five years or less from retirement: the countdown is on) and realization (when planning and reality meet). Since retirement may last more than three decades, ongoing planning is a must.

Important in your success will be the ability to stick to your plan and to work with an advisor who has the expertise to guide you. That’s why in my practice, for instance, I advise women (and men!) to follow six investment principles.

1. Take a scientific approach to your finances and understand the benefits of asset class investing.
2. Amongst risks, take those worth taking such as including a value and/or small cap tilt to your equity allocation. Avoid stock or sector concentration, as well as market timing.
3. Go international! The Canadian stock market is too limited and concentrated in a few sectors to protect you over the long-term.
4. At all times, strive to keep investment fees and taxes as low as possible.
5. Rebalance your portfolio on a regular basis. Take profits on what has done well and buy these asset classes that underperformed. That’s “sell high and buy low”!
6. Don’t let the news of the day sway you from your plan. Today’s crisis is tomorrow’s history.

These investment principles can help lay the foundation needed to create a sound financial plan that takes a woman through her lifetime and drives her own financial success.