How To Empower Women Investors In Male-Dominated Markets

No one knows saving money techniques better than women, but factors such as gender roles, a bias in imparting knowledge, or lack of opportunities to unravel the stock market trading space mean that women are not well-versed in equities.

V.L.A Ambala
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When we talk about financial planning by women, it is pretty evident that we are still a long way from reaching financial gender equality. A survey by LXME titled "Women & Money Power 2022" revealed that 33% of women in India do not invest at all and that this number in the 21–25 age group stands at 40%. That means 55% of women in the country are neglectful of their investments or are not investing at all.

Another report published by SEBI shows that in the equity F&O segment, men dominated trading, representing over 80% of traders in both FY19 and FY22.

In FY22, men accounted for 84% of traders, while women's participation declined. Despite women making up only 16% of traders, they accounted for 28% of profit makers, showing promising results. Within the active trader group, women constituted 21% of profit makers. Both male and female loss makers saw a decrease in average losses, with women experiencing an average loss of Rs 1.3 lakh in FY22 (down from Rs. 1.9 lakh in FY19) and men averaging Rs. 1.1 lakh in losses (down from Rs. 1.7 lakh).

Participation in futures trading fell from 43% in FY19 to 11% in FY22, while options trading increased significantly, with index options and stock options traders multiplying by approximately 8 and 5 times, respectively, in FY22 compared to FY19.

Why do women often sidestep the Stock Market?

The above statistics clearly underline how women are not making their own money decisions. The problem could perhaps stem from different factors, such as the fact that they lack financial support and stability, have limited or no knowledge of stock market trading, do not have enough time to devote as they have the added responsibility of the household, and are conditioned to save and not invest and expand.

Strategies to Empower Women Investors

Trading has a lot of prospects and rewards; therefore, women need to have knowledge of it and make it a part of their financial agenda. Here are some ways in which a beginner can refer while starting her trading journey:

Acquire knowledge and understanding of the market

The first step should be to acquire an in-depth understanding and know-how of the financial market to update oneself with its terminologies and nuances. It is best to read books on trading and investments, watch related YouTube videos, and subscribe to YouTube channels that enlighten you on every facet of the stock market. 

Knowing the difference between trading and investing

We should know the diverse forms of market participation. That means knowing the difference between trading and investing. While investment is a long-term activity, trading is for the short term. Trading entails intraday trading, swing trading, and so on. 

Start by learning technical analysis if you want to succeed in trading. Technical analysis can be beneficial as it can help define entry strategies, exit strategies, etc. 

Entry, exit, and money management

The three important aspects that one needs to be cautious about are entry, exit, and money management. First, begin by outlining an entry strategy, which basically means the foundation, basis, or logic on which one is taking an entry in a stock or any instrument that you trade. 

Next, it's equally important to have an exit strategy, which again is to realise the logic of your exiting a stock, that is, in profit or loss. 

Thirdly, one needs to have correct money management, risk management, and stop loss management approach so as to avoid a huge loss in one trade. 

Enrol in a course and seek guidance

One should practice trading as a profession. It takes dedicated time and effort to learn and hone trading skills. This entails enrolling in courses or taking guidance from expert traders. Professional traders maximise profits while minimising losses by combining fundamental and technical analysis, as well as risk management techniques.

No one knows saving money techniques better than women, but factors such as gender roles, a bias in imparting knowledge, or even a lack of opportunity to unravel the stock market trading space mean that women are not as updated and well-versed about equities.

After all, equity is one of the best-known ways to maximise one’s wealth, but women need to embrace and not shy away from stock investments. We need to change the conditioning of their mindsets, where women have been taught to save into conventional and trustworthy fixed deposits and post office recurring deposits instead of taking risks to benefit in the equity markets.


V.L.A. Ambala is a SEBI Registered Research Analyst at Stock Market Today. Views expressed by the author are their own

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