The investment market is not only a men's world and a club for insiders

The financial industry is still feeling the effects of lockdowns, related supply chain disruptions, the energy crisis and is struggling with the ghost of long-forgotten inflation, Camilla Dahl Hansen, Chef Experience Officer at Saxo Bank, says that these changes are a good moment to encourage more women to invest - but also that the entire financial industry is responsible for this.

In recent years, more diverse groups have entered the investment markets, particularly in terms of age and gender. Although there has been a lack of women in the investment field for a long time, this is finally starting to change.

However, because markets are highly volatile, it is critical that we continue to strive to create an inclusive and diverse class of investors and savers.

Present energy crisis, as well as rising inflation and interest rates, have created further barriers for investors who fear increased expenses leading to unsustainable monthly cash flows. This has a particular impact on both current and aspiring investors, who are more cautious about their finances, making investing seem even more difficult.

This problem is compounded by new investors' lack of knowledge on how to deal with market volatility. Many new investors are experiencing volatility for the first time and remaining calm is essential. The current market situation may seem like a bad time not only to invest money, but also to start the adventure with investing. Despite the looming bear market, the financial sector can still do much more to remove and overcome obstacles to financial equality.

The secret language of finance

It is clear that the world of finance and investment remains quite conservative. Although the lack of female role models is noticeable, a bigger problem is talking about investments, which is like a club for insiders - many people believe that in-depth knowledge is necessary to buy a single share or enter into any financial transaction. Research organized by JP Morgan showed that approximately 64% of women believe that investing is complicated, and 34% associate investments with volatility. The world of investing is often described as if it holds some secrets, which makes entering the markets even more difficult. That's why it's important that the entire financial industry continues to spread the message that investing is for everyone, not just a select few.

Of course, every investor should have some working knowledge of how investments work, including how long they will hold their investment (time horizon) and whether they will invest on their own or through mutual funds where their finances are managed experts (risk tolerance).

However, when women decide to take this step and start their adventure with investing, the above-mentioned study shows that 65% of them believe that it is difficult to determine the results of investments, and 42% would prefer more transparent communication about products. 48% of female investors would also be interested in a simple investing guide.

Better communication and the provision of simple investment guides would improve market access not only for women, but also for other groups underrepresented in markets, as well as for any aspiring investor. As a result, the financial industry has even greater incentive to focus on dialogue, transparency, clear communication and accessibility for novice investors.

Why should women invest?

Less than one in five women invest regularly compared to more than three quarters who save regularly. This limits the average person's long-term retirement savings horizon because there is an obvious difference between simply saved money and invested savings.

Moreover, we now live in a time where the combination of skyrocketing inflation and negative interest rates threatens to reduce our savings if they are not invested appropriately.

And women should not be afraid to invest their funds. Numerous studies proves that women are, on average, better at investing than men because they tend to diversify their portfolios better and make fewer trades, which lowers their trading fees and provides a higher return on their underlying investment.

Accelerating the process towards financial equality

Cultural change won't happen overnight, but an important step in the right direction is to become aware of current cultural misconceptions, correct them, and actively seek to solve the problems that prevent women from investing on the same scale as men. Whether your investing goal is to take your family on vacation, buy a new car, or retire at a younger age, everyone should be able to take control of their savings.

That's why we need to start a discussion about inclusive investing and reach out to investors - taking into account both their level of experience and where they look for information about investing. At Saxo, we have seen an increased interest in investing from women and we recognize that supporting it is our shared responsibility. We have made progress, but it is time to meet this challenge and accelerate change.

Author Camilla Dahl Hansen, Chief Experience Officer, Saxo Bank