Article

Ladies, Remain Proactive in Indian Stock Market

06 Sep 2019

There is a certain noticeable irony about Indian women in capital markets. In the last 10 years, we have had some of the finest and largest banks and financial institutions in India led by women. State Bank of India, ICICI Bank, Axis Bank, HDFC and Kotak Bank all either had women at the helm or as key members of the top management. This is not just in India. In the last few years, the chief of the IMF, the head of the Federal Reserve, and the head of European Central Bank have all been women.

But can you think of 20 iconic investors in the world? You would probably count Warren Buffet, Bill Ackman, George Soros, John Templeton, Jack Bogle, Peter Lynch and by the time you are at 20 you may not have counted a single lady. The same applies in India too.

Why are women missing in the investment scene in India?

If you were to watch investors and analysts mouthing eloquent on markets, you will find that women are few and far between. According to the many, women may be better suited to structured roles like banks, insurance, even engineering; but tend to be uncomfortable in unstructured areas like investing. But if you look at the number of women who are turning into first generation entrepreneurs, that hardly seems to be a justifiable answer. The actual answer appears to be that women, perhaps, never had the opportunity to participate in a big way in investing. Here is why women need to get more proactive in investing.

Firstly, as more women enter the income earning stream, it is their privilege and obligation to have a greater control over their investments.

Secondly, there is no rocket science about investing and it can be done by anyone with an eye for detail and diligence in execution. It has been observed in most professions that women perform better in both these areas.

Thirdly, women can bring a new perspective to investing; that has been hitherto missing. In the process, investment approaches can become richer.

How women can go about becoming proactive in investing?

As mentioned earlier, successful investing has been all about an eye for detail and methodical execution. Most women come endowed with some of these basic capabilities and therefore investing should be a logical corollary. Here is how to go about it.

  • Start by opening a trading account and also open demat account with a broker you are comfortable with. That is the first step to investing since you need both these accounts to start investing in the equity markets.

  • Focus on your comfort zone to begin with. Start looking at companies that operate in businesses that you understand. You will have enough choices available in the market. Keep your ears and eyes open at roads, malls, supermarkets, gatherings etc.

  • Adopt the do-it-yourself approach. When you are comfortable with a certain sector, start looking at the analytics and financial performance of the stock. Don’t obsess yourself with tips and recommendations at this point of time.

  • Stock market investing is all about investing in quality. Since you are starting out in the investment game, make it a point to focus on companies with good management. They are always safer bets compared to companies that could have corporate governance issues in the future.

  • Adopt the online trading approach. Calling up your broker and getting the order executed can be cumbersome and ineffective. As an online investor you have greater control over the execution and the order flow.

  • Take a long term approach to investing in stocks. Women, by default, are able to take a longer term approach compared to their male counterparts. The power of compounding works best for you when you hold over the longer term and let money work hard for you.

  • Adopt a systematic approach to investing in stocks. It is not only in mutual funds but even in equities you can adopt a phased approach. For example, demat allows you to even buy a single share of a company in the stock market. You can use the power of phased buying to gradually create a solid portfolio over time.

Women are still a very small percentage of active investors in India. That largely stems from their focus on gold and other assets. It is high time that Indian women experience the power of equity investing; and the time is now!

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Ladies, Remain Proactive in Indian Stock Market

06 Sep 2019

There is a certain noticeable irony about Indian women in capital markets. In the last 10 years, we have had some of the finest and largest banks and financial institutions in India led by women. State Bank of India, ICICI Bank, Axis Bank, HDFC and Kotak Bank all either had women at the helm or as key members of the top management. This is not just in India. In the last few years, the chief of the IMF, the head of the Federal Reserve, and the head of European Central Bank have all been women.

But can you think of 20 iconic investors in the world? You would probably count Warren Buffet, Bill Ackman, George Soros, John Templeton, Jack Bogle, Peter Lynch and by the time you are at 20 you may not have counted a single lady. The same applies in India too.

Why are women missing in the investment scene in India?

If you were to watch investors and analysts mouthing eloquent on markets, you will find that women are few and far between. According to the many, women may be better suited to structured roles like banks, insurance, even engineering; but tend to be uncomfortable in unstructured areas like investing. But if you look at the number of women who are turning into first generation entrepreneurs, that hardly seems to be a justifiable answer. The actual answer appears to be that women, perhaps, never had the opportunity to participate in a big way in investing. Here is why women need to get more proactive in investing.

Firstly, as more women enter the income earning stream, it is their privilege and obligation to have a greater control over their investments.

Secondly, there is no rocket science about investing and it can be done by anyone with an eye for detail and diligence in execution. It has been observed in most professions that women perform better in both these areas.

Thirdly, women can bring a new perspective to investing; that has been hitherto missing. In the process, investment approaches can become richer.

How women can go about becoming proactive in investing?

As mentioned earlier, successful investing has been all about an eye for detail and methodical execution. Most women come endowed with some of these basic capabilities and therefore investing should be a logical corollary. Here is how to go about it.

  • Start by opening a trading account and also open demat account with a broker you are comfortable with. That is the first step to investing since you need both these accounts to start investing in the equity markets.

  • Focus on your comfort zone to begin with. Start looking at companies that operate in businesses that you understand. You will have enough choices available in the market. Keep your ears and eyes open at roads, malls, supermarkets, gatherings etc.

  • Adopt the do-it-yourself approach. When you are comfortable with a certain sector, start looking at the analytics and financial performance of the stock. Don’t obsess yourself with tips and recommendations at this point of time.

  • Stock market investing is all about investing in quality. Since you are starting out in the investment game, make it a point to focus on companies with good management. They are always safer bets compared to companies that could have corporate governance issues in the future.

  • Adopt the online trading approach. Calling up your broker and getting the order executed can be cumbersome and ineffective. As an online investor you have greater control over the execution and the order flow.

  • Take a long term approach to investing in stocks. Women, by default, are able to take a longer term approach compared to their male counterparts. The power of compounding works best for you when you hold over the longer term and let money work hard for you.

  • Adopt a systematic approach to investing in stocks. It is not only in mutual funds but even in equities you can adopt a phased approach. For example, demat allows you to even buy a single share of a company in the stock market. You can use the power of phased buying to gradually create a solid portfolio over time.

Women are still a very small percentage of active investors in India. That largely stems from their focus on gold and other assets. It is high time that Indian women experience the power of equity investing; and the time is now!