MEN, WOMEN AND RISK
The release of this publication coincides with Women’s Month, and it contains three articles focusing on women: the cover story on women investors; one on how different arrangements between partners, within and outside of marriage, can result in different financial outcomes; and a profile of Raazia Ganie, one of the increasing number of women in senior positions in the financial sector.
It’s a well-established fact that men take more risks than women; hence they pay higher car insurance premiums. However, one area where women could try to behave a little more like their male counterparts is in long-term investing. Here it is beneficial to take on more risk, by investing in growth assets such as equities, instead of “staying safe” in cash. This is because investment risk, in the form of market volatility, while high in the short-term, diminishes over time, in the same way that the numbers of heads and tails you get on flipping a coin even out to 50-50 the more flips you do. Advantageously, this approach produces returns likely to beat inflation by a significant margin, unlike investing in cash, which one adviser recently nominated the “highest-risk” investment owing to its inability to produce a decent real (after-inflation) return.
Women needn’t act completely contrary to their nature and take irresponsible risks, such as short-term bets on crypto or forex, but they can improve their investment outcomes by acting a little less cautiously when it comes to saving for their retirement. Enjoy the feature on page 8.
Many women are still very reliant on their partners for their financial security, a fact taken up in the article “Head over heart” on page 13. But the type of financial arrangement you have with your partner is dependent on whether you are married or not, and, if you are, the type of marital regime you are married under. Unpleasant as it may seem, you need to know where you will stand in the case of the death of your partner or divorce.
Other edifying reads in this edition include a look at taxes on cryptocurrencies, prospects for sub-Saharan Africa as it struggles to emerge from the pandemic, and an update on ESG investing: for those new to the term, it means investing taking environmental, social and governance criteria into consideration.
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