Studies show that a person’s attitudes and beliefs about money have a huge impact on how they view investing. In general, women have a tendency to let others make important decisions for them, and overall are less likely to take risks. This presents a problem when it comes to investing, which is primarily about risk and return.

Investing your money is important. It can give you financial security and independence, as well as prepare you for important life events — your children’s education, your retirement, unforeseen financial emergencies. Even if you use the services of a financial advisor, be prepared stay in control of your investments. Although this may sound overwhelming at first, there are a few basic investment guidelines that you can use to enrich your future:

  1. Educate yourself. The investment world has many different avenues that range from Certificates of Deposit (CDs) and Treasury Bills (T-Bills) to stocks, bonds, and mutual funds. The more you know, the better your chances of becoming a savvy investor. Read Seven Principles of Successful Investing for a good introduction to the topic.
  2. Set clear financial goals. Decide what you need to do to make your future secure and enjoyable. This can include everything from starting a retirement fund to starting to put aside funds for college, medical expenses, vacations, real estate investments, as well as an emergency fund for any unforeseen events that may drain your savings.
  3. Create an investment plan. Once you have set your goals, you need to create a solid investment plan. First, determine how much money you have to invest, and start thinking about how to make your money work for you to achieve your financial goals. Rather than a set of rules, an investment plan provides guidelines that can help you organize and direct your energies. Financial plans should have continuity and a solid foundation, but at the same time be adaptable to changes that invariably happen in life. For more on financial planning, read Developing a Personal Financial Plan.
  4. Hire a financial consultant. Consulting with a professional investment counselor can give you an edge in creating your investment portfolio. Using a mutual fund is a way to hire a financial consultant without spending a lot of money upfront. Financial consultants can sometimes be fallible, which means you should always take an active role in your investments. For more information on how to begin this process, read Hiring the Ideal Personal Finance Advisor.
  5. Diversify your portfolio. When setting up an investment portfolio, you should make sure to diversify your investments; that is, make sure the risk is spread out and not all focused in one place. Some investments are safe but have little return (bonds, money market, treasury bills), whereas other investments come with a greater risk and thus a greater yield (stocks, funds, and futures). Also, some investments work better on a short-term basis, while others are better over the long term. By diversifying your financial portfolio, you create more security for yourself. For more on this, check out Diversify Your Investments.
  6. Set up an emergency fund. You should safeguard your finances by setting up an emergency fund to deal with potential problems that could drain your finances (such as unforeseen medical or legal problems). Building an Emergency fund contains helpful information on how to get started.
  7. Plan for retirement. You should prepare for that time when you will no longer be working and collecting a regular paycheck. Keep in mind that the earlier you start, the longer the money can benefit from compounding. So if you don’t have a retirement fund already in place (for example, a 401(k) or an IRA), start one immediately. Read 401(k) Basics and 10 IRA Strategies to get started.
  8. Avoid high-risk investments. High-risk investments are like gambling on long shots. On the whole, you have to be prepared to lose your money. Even in the world of stocks and futures, some investments are much riskier than others. Avoid Risky Investments provides a good overview to this issue.


Ten Investment Tips for Women – Barbara Swenson

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