Last Updated on January 4, 2021
Investing is an activity usually associated with men since they are usually theh heads of households and often assume the role of the money manager. But there are plenty of reasons women should consider investing too because life events could happen to them that make them financially vulnerable.
For example, they may undergo divorces, outlive their husbands or in some cases have a better grasp on finance than their husbands. These are the best investments for women to make to secure their futures and take care of their children once they pass away.
Safe Pick Stocks
Depending on their current family situation, women may decide to take fewer risks with investing is in their best interest. The stock market may be volatile, but there usually are companies that are solidly run that have steady earnings. These would include various blue chip and consumer staple stocks that represent companies whose products are always in demand.
You still need to make sure you invest in the right company, but these kinds of stocks or mutual funds usually provide you with low risk steady earning opportunities.
Life Insurance Or Annuities
Life insurance and annuities are both insurance products, but annuities are insurance you pay into to make sure you have a stream of income now or later, and life insurance will pay your designated beneficiaries income if you pass away. Single mothers and widows could be especially interested in these investments with both the tax benefits as well as making sure their financial plan will work if worst-case scenarios happen.
Annuities have the advantage of having no contribution limits, growing tax-free, and having professionals pick the investments for you instead of you needing to be extremely knowledgeable about the securities you purchase. But they can come with higher fees and require other commitments that IRAs and 401ks don’t have.
Precious Metals IRAs
Investing in gold is not the first strategy recommended to most women, but it is something that should be included in potential investment plans. While setting up a gold-backed IRA account it can be a little more expensive to start, but it can be a great way to ensure your money will be safe in the long run. Physical gold will not undergo management changes or bankruptcy like publicly traded companies, and it can gain in value during periods of inflation.
It still has risks, but its tangible benefits are such that can balance out the other risks in your portfolio.
There are always cases to be made for bonds or mutual funds that are bond funds because they can be safer than stocks and have grades that inform investors of their risks. But generally, the rule is the lower the interest rates, the lower the risk but the lower your earnings will be. The higher the interest rates, the higher the risk will be.
Bonds can be great investments to buy into when the Federal Reserve’s interest rates are high because their prices are usually low at that point, and once interest rates go back down, they can be resold at a higher price. The disadvantage to bonds is that the bondholder usually only sees gains at a fixed rate until maturity, and they usually aren’t the best hedges against inflation.
The bottom line is women have a lot of investment choices, and they can even invest in companies or entities that share their personal values. If you’re a woman who is interested in starting investing now, you should take the time to find out about your 401k options, or get in touch with an advisor who can give you the inside scoop on alternative investments like physical gold.
Investing is an activity usually associated with men since they are usually the heads of households and often assume the role of the money manager. But there are plenty of reasons women should consider investing too because life events could happen to them that make them financially vulnerable.