4 Mutual Fund Investing Tips For Married Women
Here are some Mutual Fund investing tips for Married Women.
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Anecdotal evidence suggests that though Indian women tend to make their first investment earlier than Indian men, their financial confidence usually dips after marriage. On the contrary, Indian men tend to rise in financial confidence after they tie the knot. A strange phenomenon, indeed!
Marriage also marks a critical junction in our lives (men and women alike) as it’s often the point in time when we reflect and think about our future. If you’re a recently married woman, you need to make an effort to keep your financial confidence sky-high so that you don’t end up investing only in fixed deposits - ignoring the mutual fund option, which could serve as a wonderful engine for wealth creation. Here are some Mutual Fund investing tips for Married Women.
Enlist the support of an Advisor
Although the cost savings associated with investing directly could be tempting, a trusted, conflict free Mutual Fund advisor can go a long way in stabilizing your portfolio. Try to find one through your network of friends or colleagues. A good advisor can go a long way in protecting you from common mutual fund investing bloopers (that usually stem from emotions), and set you up for long term wealth creation.
Contrary to what you may have been led to believe, Mutual Fund investing isn’t rocket science at all. There are plenty of online resources offering you truncated lists of the best funds to pick in each category. CRISIL regularly ranks mutual funds as well. Truth be told, most people don’t even require knowledge that extends beyond the universe of the top 5 mutual funds in each category (as over diversification can in fact prove detrimental).
You do not really need to read the financial news every day (or know the alpha and beta of a particular fund for that matter!) to successfully invest in mutual funds. Even half an hour a month studying the top fund picks will suffice. Once you’ve invested, ignore the market noise and don’t churn your portfolio frequently.
Balance your Risks
Women tend towards risk aversion with respect to investments. For this reason, they may favor lower yield mutual funds such as debt funds, short term funds or arbitrage funds over more aggressive equity oriented funds.
While this approach may lead to capital protection in the short term, it would also most likely result in compromised returns in the long term. Take a risk profiling questionnaire to figure out your most suitable asset allocation. Once you’ve arrived at your optimal balance between equity and debt mutual funds (say, 30:70) stick to it resolutely and rebalance your portfolio periodically to bring it back to your optimal allocation.
Plan your own retirement fund
Studies have indicated that despite some divergence in beliefs and attitudes of men and women, their financial aspirations are more or less similar, except for men displaying a higher propensity towards accumulating a retirement fund.
This would be a mistake for two reasons - firstly, women tend to outlive men and so need to have additional money saved up for the extra years. Secondly, marriages don’t come with a guarantee, and there’s a small chance that you may need to fund your own retirement.
Mutual Fund SIP’s (Systematic Investment Plans) are a fantastic way to create a large retirement corpus with relatively insignificant monthly amounts. If you don’t have your own income, you could even put away a small portion of the discretionary spends that your spouse may be provisioning for you. A SIP can be started with an amount as low as Rs. 500 per month!