Women and Investing

Investing is one way to put your money to work. Being smart about your investments can help to beat inflation and build wealth in the long-term. However, women can seem to be a little more hesitant compared to men when it comes to navigating the investing space. This could be attributed to numerous challenges and barriers faced by women investors that may impact their confidence. 

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Challenges faced by women investors

Let’s dive into some of the challenges, which might actually set women apart from their male counterparts.

The wage gap

According to research conducted by Statistics Canada, women typically earn less than men. In 2021, female employees aged 25 to 54, for example, earned $0.89 for every dollar earned by men. Less earnings might potentially lead to lesser savings over the long term, which means there’s a higher probability for women to face poverty in retirement than men.

Maternity and caregiving responsibilities

Women are more likely to take maternity leave, which can lead to various professional and financial setbacks. Additionally, several women serve as primary caregivers to children and older family members. Studies indicate that women account for nearly two-thirds of caregivers providing 20 or more hours of care per week – making it challenging for them to focus on career growth and wealth building opportunities.

Separation and divorce

As per recent data from Statistics Canada, over 40,000 marriages ended in divorce. Women who go through a divorce or separation may have to deal with financial difficulties alone. That’s why it's important for women to play a more proactive role in their financial future. That way, they can be prepared for any eventuality. 


Women are expected to live longer than men. Statistics show that a woman's life span is four years more than that of a man. In Canada, the life expectancy is 79.8 years for men and 83.9 for women. The average age for widowhood in Canada is 56. Women need to consider planning for these eventualities. A well-rounded portfolio can help with a more comfortable retirement.

Common investing mind blocks

Psychology plays a major role in investing. Often, psychological influences and biases can cloud the vision and affect the financial behaviours of investors, including women. Let's look at three common psychological quirks that can prevent new investors from getting started.  

  1. Money: The fear of not having enough capital may stop some investors from ever getting started. When investors prioritize their lifestyle, they ignore the power of compounding, which could help their gains grow exponentially.

  2. Time: Investors, who haven't started their investing journey yet, typically fall into two categories – those who think it's too late for them to start investing and those who think they have plenty of time to start investing. Well, it's never too late to start but if you start investing early, you can benefit from compound growth.

  3. Knowledge: Some investors feel they need to know everything about the market before investing. That's not a practical approach and they would be better served by starting gradually and learning as they go.

It's important to look beyond the challenges and take control of your financial future. As the saying goes, "A journey of a thousand miles begins with a single step".

Taking stock of your financial situation and knowing why you are investing can help you set clear goals to work toward. This is an important first step to take toward creating your investing strategy

Setting financial goals as a woman

For female investors, consider getting started by identifying specific goals – your children's education, a new car, financial security, etc. Knowing your financial goals can help you choose the right kind of investments. A well-known framework that can help you get started is a SMART goal. You simply need to make sure that your goal is Specific, Measurable, Attainable, Relevant and Time-Bound.

Here's an example of a SMART goal.

Jennifer is a first-time investor and wants to save for her future. Her goal is to retire with $1,000,000 in 20 years based on her current or projected income.

  • The goal is specific – it tells you what she wants to achieve
  • The goal is measurable – she can check her growth over time
  • The goal is attainable – her projected income stream appears sufficient to allow her to put aside a specific amount bi-weekly or monthly to reach her financial goal.
  • The goal is time-bound – she wants to achieve her goal in 20 years
  • Jennifer will need to periodically assess whether this goal is relevant to her. This is especially true if her circumstances change.

You can also use online financial planning tools to take a goals-based approach to investing. The goal planning tool from TD Direct Investing allows you to set multiple goals with different time horizons as well as validate your plan and monitor your progress as you go.

Consider these timelines for financial goals

  1. Short-term goals: Most financial goals fall under this category and can have a time frame of 5 years or less

  2. Intermediate goals: Medium or intermediate goals usually have a time horizon of between 5 to 10 years

  3. Long-term goals: Any goal with a timespan of over 10 years is considered to be a long-term goal

It's important to understand the difference a time frame can make. Let's say a person plans to retire in 30 years. For this person, retirement is a long-term goal. However, there may be a person who plans to retire in 2-3 years. For them, retirement is a short-term goal. 

Questions to ask yourself before investing

  1. What are my financial goals?
    Ask yourself, 'why am I investing?'. This will help you understand your time frame. If you have a short-term goal, you may want to consider investments and the appropriate risk that aligns with that time frame. 

  2. What kind of investments should I consider?
    Take a good look at your goals and the different investment types available to you. This may include stocks, bonds, mutual funds, ETFs and more. Look into the different types of risks for each investment. Ensure that the investment type(s) you choose is well researched and has the potential to help you reach your goals. 

  3. How long should I stay invested?
    You may have multiple goals – a short-term goal of buying a car or a long-term goal of saving for retirement. Review your plan and try to estimate how long it might take you to reach your goals.

  4. Can I afford the associated costs?
    It's a good idea to be aware of costs related to buying, selling, or holding your investments. For instance, if you are holding mutual funds, you should consider the management expense ratio (MER).

  5. How does the chosen investment align with other investments?
    You may want to find out how the investments you choose fits in with your overall plan. Try to look at the big picture. Consider what you're holding at a more holistic level as opposed to just thinking of each single investment. 

On a final note

As a female investor you may want to play a more proactive role in securing your future. If you're already saving a portion of your income, continue doing so and research each opportunity before investing to see how it fits into your plan. With the right set of learning resources and tools, you could potentially overcome your fears and build an investment portfolio that you're proud of. With TD Direct Investing, you can take advantage of the goal planning tool to set goals, track your progress and adapt your plan as you go. 

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