The Motley Fool has found that there is a shift in the investment landscape for women in the United States. More women are investing at younger ages compared to previous generations. According to their study, 71% of female Gen Zers invest, compared to 63% of Millennials, 55% of Gen Xers, and 57% of Baby Boomers. In addition, a 2023 study by Fidelity revealed that 60 percent of women now invest in the stock market, up from just 44 percent in 2018.
This trend seems to be mirrored in South Africa as well. Frikkie van Loggerenberg, CEO at South African alternative investment specialists IFSA, highlighted a significant increase in the number of female investors over the past few years. These investors are primarily accessing funds through linked-investment service providers, living annuities, and endowment platforms and wrappers.
Alternative investments, which do not fit into the traditional categories of stocks, bonds, or cash, serve as an interesting indicator for broader investment trends. Traditionally, these investments have attracted more specialised, active investors. The rise of alternative investments and the increasing accessibility of these investments has captured the attention of a new segment of investors, with women comprising an important part of this group.
van Loggerenberg added: “We have long emphasised the importance of alternative investments in a well-rounded investment portfolio, and we welcome the increased interest in this asset class from the wider investment community. By incorporating this asset class into their investment strategy, individuals of any age or gender can achieve diversified returns, leading to more consistent growth over time.”
It’s important to consider several factors before diving into alternative investments. Potential investors should ask whether the investment will contribute to their retirement or a specific goal, and what the associated risk and time horizon are.
Alternative investments are considered higher risk and require time to achieve the desired return. They may also come with liquidity constraints, as investments are made directly in the fund’s underlying assets. This is in contrast to the listed environment, which may offer more liquidity but can also be more susceptible to market sentiment and news.
van Loggerenberg believes that the trade-off between liquidity and risk is why you should receive a higher yield for investing in this asset class and be willing to hold onto it for a longer period of time. They have observed that women generally maintain their investment strategies for longer than men, which is more likely to lead to desired returns, as opposed to trying to time the market or to have an overly active investment strategy.
For more information on alternative investments or assistance in creating a well-balanced investment portfolio, it’s advisable to seek guidance from an independent qualified financial advisor.