Use your socialization skills to gain knowledge: Women generally tend to be more social in nature than men. They like to discuss things with their friends and have a couple of different perspectives before making a decision. They can use this same quality to gain more financial knowledge from their peers. This is particularly helpful for women with little or no investment experience. Once you start interacting with your group of friends who make investments, you get to know about the basics of investing. You can augment the knowledge gained through conversations or by referring to some study material about basics of investing. Information is wealth. When it comes to investment decisions, the more information you have, the better it is. Before making the decision, analyze the information and make sure that it is in tune with your risk profile.
Multitasking in life = Diversification in portfolio: Multi-tasking is an inherent quality of every woman. They seamlessly manage their homes, take care of their parents, families and careers, and emerge winners. In this lies the most important lesson of investment: diversification. Investing in different asset classes rather than concentrating on a single asset class is called diversification. This ensures that the risk associated with investments is spread out and not concentrated at one place. Assess your risk profile to know exactly how much risk you are comfortable with. Pick the different funds which collectively match the calculated risk. Don't overcrowd the portfolio in the name of diversification. Be selective in picking the funds.
Attention to detail: Women have a great eye for detail. They keenly observe everything happening around them. Whether they are picking something for their wardrobe or picking healthy food for family, they pay attention to every minute detail to make sure they pick the best. The same quality of attention to detail is quite necessary while making any investment decisions. Make sure you go through all the documents before buying any financial products. Know exactly what you are committing yourself to. This helps you in knowing where your money is being parked and the reward you are gaining by making a particular financial decision. It also ensures that your money is working hard enough to appreciate the hard work you have put in earning it.
Make gold a part of your portfolio, not just your wardrobe: Gold and women complement each other very well. The metal not only enhances a woman's look, it also enhances the portfolio. A part of the portfolio should be invested in gold. Gold is generally considered as a safe haven against market volatilities. When investing in equities, gold can serve as its counterpart. One has to make sure that Gold ETFs or FOFs are a part of the portfolio.
Monitoring a portfolio is not as tough as managing a household: Managing a household is one of the toughest tasks women accomplish with elan. They continuously monitor the situation at home to find better ways for home improvement. The same principle determines your success in investments. Monitor the investments you made on a regular basis. Always keep a check on how the investment is performing. While making investments make sure they are based on the right advice. Consult a financial planner who can help in making better informed decisions. The winning strategy lies in picking the best-in-class funds and long term investment horizon.
Nitin Vyakaranam is the founder and chief executive officer, ArthaYantra, an integrated online personal finance company.
Disclaimer: The opinions expressed in this article are the personal opinions of the author. NDTV Profit is not responsible for the accuracy, completeness, suitability, or validity of any information on this article.