Research indicates that women tend to dedicate more time to researching their investment options and are twice as likely as men to rely on financial advisers for guidance in their financial planning decisions. Numerous studies also suggest that women approach investing with a longer-term perspective and are more inclined to hold investments for extended periods rather than attempting to time the market. These characteristics can be leveraged to achieve financial independence and close the investment gap.
As we commemorate Women's Month, here are four tips to empower women to take control of their financial well-being: 1. Establish a budget and define financial goals. Avoid vague objectives and strive for specificity. For example, rather than setting a general goal like "save money for the future," define specific objectives such as "save R10,000 per month for retirement by contributing R5,000 to a retirement fund and R5,000 to a long-term investment portfolio." This level of specificity provides clarity and direction, making it easier for you to track your progress and stay committed to your financial goals. 2. Develop a comprehensive plan. This should encompass both a savings strategy (including an emergency fund) and an investment plan. 3. Automate the process. Set up debit orders for your investments and consider scheduling annual escalations in advance. This will help you invest more every year on autopilot. 4. Allow decisions time and space. Recognise your biases and external influences, and be thoughtful in your decision-making. Here are three common examples of biases: 1. Confirmation Bias: This is the tendency to search for, interpret, favour, and recall information in a way that confirms one's preexisting beliefs or hypotheses. For example, you might be more likely to remember and focus on information that supports your investment decisions while ignoring or downplaying contradictory information. 2. Overconfidence Bias: This bias involves overestimating one's own abilities, knowledge, or judgments. It can lead to taking excessive risks in investments or being overly confident in the success of certain strategies without considering potential downsides. 3. Loss Aversion Bias: Loss aversion refers to the tendency to strongly prefer avoiding losses over acquiring gains of the same or similar value. It can lead to overly conservative investment decisions, such as holding onto losing investments for too long in the hope that they will recover, rather than cutting losses and reallocating funds to more promising opportunities.
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Outsourcing investment management has become very popular among financial advisers for several reasons. Although the adoption of a DFM in your practice can significantly free up your time, add value to your clients and assist with the future growth of your business, partnering with the right DFM for your business is a crucial decision.What are the key elements to consider when choosing an investment partner for your business? The investment team at Morningstar has written previously about the local fixed income universe and the complexities of navigating the wide (and still growing) range of funds available to investors. Recent news about the potential default of loans provided to a taxi financing business, Bridge Taxi Finance, has again highlighted the care that needs to be taken in making fund selection choices in the South African fixed income universe. For our investors investing in Morningstar Managed Portfolios, click below to access the latest performance snapshot, market commentary and market performance summary:
Morningstar SA Managed Portfolios Morningstar Global Managed Portfolios (USD) Market Commentary - SA and Global Market Performance Summary - SA and Global Offshore investing used to be for wealthy individuals in South Africa however, this has changed over the years with platforms offering a range of different products with various minimums. In this article, we focus on the two most popular products namely an offshore discretionary investment and offshore endowment or sinking fund investment. As with all investments, each investor’s needs and circumstances are unique. Whilst the article below aims to outline the basic characteristics of the different offshore products, it does not aim to give tax or fiduciary advice on these products. We strongly encourage investors to consult their financial adviser for any tax and estate planning advice. For our investors investing in Morningstar Managed Portfolios, click below to access the latest performance snapshot, market commentary and market performance summary:
Morningstar SA Managed Portfolios Morningstar Global Managed Portfolios (USD) Market Commentary - SA and Global Market Performance Summary - SA and Global Source: Morningstar Income funds continue to be an incredibly popular and important component of South African investors’ portfolios. The more predictable returns, especially when compared to volatile domestic equity markets, have attracted investors to the relative safety of income-oriented funds. In the below article, we summarise some of our latest research in the SA Income Fund landscape (click here to read the full report: An in-depth look at SA Income Funds). |
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January 2025
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