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Bridging The Confidence Divide

When it comes to managing your investments, confidence can provide the power you need to overcome negative emotions that can hold you back from achieving your goals.

Unfortunately, many women experience an “investing confidence gap” when compared to men. According to a study commissioned by Merrill Lynch, women tend to be highly confident about their ability to manage day-to-day financial tasks, such as paying bills (90%) and budgeting (84%).

Conversely, among women who do manage their investments, confidence soared, with 77% saying they will accrue enough savings to remain financially secure throughout their lives.

However, when it comes to managing investments, only 52% of women surveyed said they were confident, versus 68% of men. Millennial women were found to be the least confident investors, at 46%.

Conversely, among women who do manage their investments, confidence soared, with 77% saying they will accrue enough savings to remain financially secure throughout their lives.

If you are married and relying on your partner to manage all of your investments, it’s time to have “the conversation” with your husband. To become more confident, you need to become knowledgeable about how and where your money is invested. You also need to take an active role in deciding how much risk to take on.

Women typically outlive men.  In fact, on average, baby boomer women can expect to outlive their husbands by 10-15 years! So you don’t want to be left in the dark when it comes to your investments. And if you’re single, divorced, or already widowed, having the knowledge to manage your investments with confidence is even more important to protecting your financial future.

To increase your investing confidence, consider taking these five steps:

  1. Take stock of your own attitudes about money and investments. Look yourself in the mirror and make an honest assessment of whether you have the knowledge, experience, and confidence you need to manage your financial future. If the answer is no, then take action to remedy the situation.
  2. Start Talking. Women are natural networkers who like to share experiences and challenges with others, especially other women. Put that natural tendency to work and build your confidence by learning all you can about investing from other women. Just as we learn from our own successes and failures, we can learn from the experience of other people and hopefully avoid making the same mistakes.
  3. Get Schooled. Knowledge is power, so if you don’t know the difference between a stock and a bond or a mutual fund and an ETF, start learning what you need to know. There are numerous websites and magazines that provide educational content targeted to novice investors. National Papers such as the Globe and Mail and the National Post have great financial sections including insight on not just fiancnail market, but personal finance and the economy. Don’t be discouraged if you don’t fully understand everything when you start reading.  Overtime you will find you understand more and more of what you are reading.
  4. Ask Questions. When it comes to managing your investments, there are no silly questions. If you’re married, start by asking your spouse about how your savings are invested to ensure you’re on the same page. If you work with an advisor who makes you nervous about asking questions, you may want to consider hiring someone who will be supportive of your efforts to educate yourself and to understand more about your finances today and your plan for tomorrow.
  5. Consolidate and conquer. Bringing all the pieces of your financial puzzle together into one place—whether it’s on a spreadsheet or an app on your smartphone—can help you see the big picture. This can give you the confidence you’ll need to make important decisions to manage your investments now and in the future.

Take steps to build the confidence you need to manage your investments and your finances on your own. With a little research, education, and communication, you can become a confident, self-assured investor. Get started now.

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