Women & Investing: Lean into VC
Leveraging International Women’s Day, we kickstarted a significant conversation around the broad theme of women and investing at Chiratae Ventures. The idea was to discuss women and wealth creation, independent decision making and portfolio diversification.
To delve deeper into this topic, we invited three experienced wealth managers and an investor to come together and share their insights on women’s attitudes towards financial decision-making, risk appetite, portfolio diversification, and the role of venture capital in achieving long-term financial goals. The outcome of their discussion is a thought-provoking conversation that sheds light on how to start with small steps to grow their portfolio and make financial decision-making less stressful.
Read on to discover the key takeaways from this insightful discussion and learn how to build your financial future. These insights can empower women to take a proactive approach to invest and unlock the benefits of a well-diversified portfolio.
Take charge, make it personal
Data shows that women-managed portfolios lead to better returns, and women tend to have a long-term, goal-oriented view of their investments, resulting in better risk-adjusted returns. Women also tend to save more, leading to more wealth-building opportunities.
The conversation highlights the importance of women leaning into investing, starting with setting personal goals and emotionally investing in them. The experts pointed out the significance of women taking charge of their financial futures by embracing investing and setting personal goals. Speaking from her own experience, one of the panellists highlighted the need for women to manage their wealth since they could build their portfolios around their goals and needs.
Diversify, diversify, diversify
Diversification and asset allocation are critical tenets of portfolio construction that can help ensure a healthy, stable, and consistent return on investment.
It’s essential to spread your investments across various asset classes and within those classes to minimise risk and achieve long-term sustainable returns. Women tend to be more aligned with their life goals and values, leading to a more patient, less impulsive approach to investing that can result in a more consistent, long-term portfolio.
The conversation also delved into venture capital and its potential role in a diversified portfolio, highlighting how it can help women achieve their long-term financial objectives.
The experts quickly pointed out that diversification should be tailored to an individual’s risk tolerance and investment goals. Working with a financial advisor can help determine the appropriate level of diversification for your portfolio. When building diversity in an investment portfolio, several factors must be considered, such as asset allocation, sector diversification, investment style etc.
Assets range from equities to bonds and their multiple forms, such as ETFs, MFs, AIFs, etc. Ensuring that your portfolio aligns with your financial goals and risk tolerance is also essential.
Surveys on women’s portfolios and diverse investments show that many invest in real estate, gold, fixed deposits, stocks, and cryptocurrencies.
Why and how to Lean into VC:
From the perspective of a Venture Capitalist, how does VC fit into the portfolio of women, what are some of the metrics to assess the fit, how to access a VC manager, and how does a VC fund’s risk/reward framework align with a woman’s long-term financial goals.
It’s crucial to limit allocation to VC and invest through a fund. Investing has traditionally been male-dominated, but women tend to save more and build more wealth, and they take a more long-term view of their investments, which plays a significant role in their higher returns.
it is important to limit the allocation to this asset class and invest through a fund because investing directly in businesses comes with their share of risk. The VC expert indicated that as long as an investor’s life cycle stage objective, goals, and ability to take risks are aligned with long-term investing, there is no reason why a portfolio should not include VC as an asset class.
In conclusion, investing in a diverse portfolio that includes venture capital can help women build wealth and achieve their long-term financial goals. Understanding the risk/return profile of different asset classes and working with a manager with a history of good returns and a stable team is essential. Women can achieve their financial goals and build a secure future with the right approach and a commitment to diversification.
Lean into VC is the first episode of the Women & Investing: Your Money + Your Decision = Better Returns.
Watch the full episode: