Making Your Money Work For You - Business Media Group

Making Your Money Work For You

Money Work

Over time we have learned that one reason why women shy away from the stock market is that they can think the investment world is untrustworthy.  This is understandable because the media is full of lurid stories of scams, fraudsters and rip-offs.  Most of the shark infested waters are in the unregulated sphere of financial services but if you are dealing with a firm that is authorised and regulated by the Financial Conduct Authority you have more safeguards.

It would be wrong to consider all regulated financial adviser firms as angels. Perhaps a bigger problem is the impression many women can have that investing in the stock market is unsafe.  The dangers of investing are scaremongered by the mainstream media where coverage of financial markets is sensationalist, intermittent and unbalanced. When stock markets drop dramatically, it is the main story.  There will be footage of desperate traders looking at screens covered in red numbers… that means losses.  But funny how the days when stock markets are up sharply it doesn’t make the top story!

Of course there is no guarantee that you will not at some point sustain losses.  But if you are investing for the long term the odds of making more money than if you left it in the bank are massively in your favour. Over a ten year time frame nine times out of ten investing in the stock market will be more rewarding financially than leaving it on deposit at a bank. Since the financial crisis, which has seen the returns from deposit accounts virtually disappear, the gap in performance has been highly significant.

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About a third of women in their 50’s have more than £5,000 cash at their disposal yet less than 10 per cent of women of this age have a stocks and shares ISA.  This degree of caution has certainly been misplaced over the last nine years.  The era of rock bottom interest rates has been with us for 9 years which has meant cash savings have earn’t next to nothing and without doubt your money in the bank now will buy less than it did nine years ago because of inflation.

Meanwhile a £5000 investment in the UK stock market nine years ago would be worth about £14,000 now, whereas £5,000 left on deposit earning 0.5% a year for nine years would now be worth £5,230.

Of course stock markets can give you a bumpy ride; but if you haven’t already, at least think about investing in shares.

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