My grandmother loved to gamble. While she was a child of the depression and extremely frugal, she also loved putting a little money on bingo with friends, buying the occasional lottery ticket, or even playing the slots in Atlantic City. Her motto was, “You don’t have a chance if you don’t take a chance.”
Diversification, Women and Risk
While investing is certainly different than gambling, most women don’t share this sentiment when it comes to risk. There have been multiple studies done, and we have written previously that women tend to be more risk averse than men.
While this can be a positive trait in many ways, unfortunately it can also be detrimental to long term financial goals.
I read a great article recently from the Women’s Institute for Financial Education that discussed the different types of risk inherent in investing. The key takeaway was this quote:
“We’ve found that investing stymies many clients, especially women, because they are searching for the perfect investment. Unfortunately, the perfect risk-free investment isn’t out there. The good news is that you don’t need to search for the one best investment. A diversified portfolio of multiple types of investments that respond differently to changing economic factors can reduce risk and help you reach your financial goals. Keep an eye on the long-term prize and feel less stress over the short-term ups and downs.”
A financial planner can help you evaluate your financial goals and determine what level of risk is appropriate and necessary for your investments. Creating a customized plan will give you specific feedback to help you reach your goals.
Copyright: iqoncept / 123RF Stock Photo
