How Indian Women Invest?

By Manju Yagnik, Vice Chairperson, Nahar Group and Vice president, NAREDCO Maharashtra     Indian women have come a long when we talk of women investors. Owning to their education and exposure, their financial capabilities have increased manifold. They are part of all decision making processes, besides playing an important role in businesses too. Nowadays with both partners earning households, major financial decisions are jointly taken. With more and more women joining the workforce, there has been a tremendous impact on Indian demographics as far as women investors are concerned.   Women like to research, undertake due diligence and take calculated risks. Thus prefer traditional instruments like: Gold, Real Estate, Bank FDs, PF, EPF and other Government schemes. But with changing times where women are achieving remarkable financial independence they are investing in new-age instruments, thus becoming wealth-creators of the nation.   Gold has been the most preferred investment for Indian households. Precious metal has many merits besides being in the form of jewelry, which women love. Globally it acts as a hedge against inflation/ financial emergencies/ natural calamities, thus helping the family when need arises. With investment in gold women have big role in economy as the currency is backed by gold. Moreover, it has huge inheritance value, which women inherit from their parents, and which they pass on as parents to their children. It is advised to invest in gold bars or even Gold Bonds to avoid loss via pilferage, if you are investing too much in jewelry.   The next best thing after Gold are bank’s Fixed Deposits, safe and sound, a steady source of income for many homemakers as the rate of interest is fixed and interest payout can be fixed as per needs of the depositor, i.e. annually, semi-annually, quarterly. While parking your funds in FDs in normal times is recommended but in times of the rising economy, other instruments can yield higher returns like Mutual Funds and SIPs.   Investment tops the charts with women investors buying Real Estate, considering it to be safe, stable and gives assured returns in the long run.  In the recent past women have started realizing that real estate as a sector helps in generating income and giving returns. The value of real estate especially in urban cities keeps growing year by year and property has a legacy value. It is the safest form of investment that keeps generating money via rentals, which grows year-on-year basis. The rental income can support your EMI payouts or just supplement your income, if the need arises. In today’s time, it has got easier for women to invest in property due to various tax and home loan benefits offered by banks and HFCs for women homebuyers. Under Pradhan Mantri Awas Yojana, a woman holds the ownership of the house, besides getting home loan at an attractive terms, there is subsidy and tax benefits too. Above all, in case of any financial emergency, you have a roof above your head to fall back on. To sum it up, real estate is perfect combination of macroeconomic trends, government initiatives, and market cycle which ensures returns for those who are able to identify and execute the right opportunities at the right time.   However, it is critical to understand RoI in various instruments. With time value of gold and property changes, but real estate always gives higher returns as compared to any other instrument.   Investment in the Equity Market comes with its own risk, no doubt there are significant gains in equity if invested in the right stocks at the right time, but the volatility of equity market makes it difficult for new investors. Even though mutual funds and shares have caught the attention of many, the risks that come along are what makes one indecisive about such an investment.   The key drivers for women becoming financial decision makers are higher education, financial independence, exposure to global trends and better understanding of market dynamics. Besides they have a strong desire to save, invest, hedge themselves from any uncertainties and create wealth.   Now that we are entering into new financial year, right from the beginning, women should aim for having a balanced portfolio while taking into consideration the overall investment scenario.