Why women are risk aware not risk averse, covid-19 is triggering fears of a global recession, the market expects the UK to cut interest rates and more women in the UK are investing in BTL properties
Weekly newsletter for women who want to be smart about money: financial news, personal finance and investing
Welcome to our #10 weekly newsletter in 2020.
Every week we curate key articles and content so you can stay informed and inspired about money and investing without the boring bits!
This is your weekly go-to place to read up on all things money-related.
We spend hours sifting through content every week and apply a female-lens to news and content about money and investing so that it is meaningful to you.
Ultimately we want to support you in making well-informed financial decisions, grow your net worth and ensure your financial security.
From The Purse…
Editorial from the Founder
We live in a society which perpetuates money myths about women.
It is often said that women lack confidence or simply do not understand money and investing. Possibly the most common and damaging money myth is that women are risk averse.
Why does this matter?
Because this outdated money myth has marginalised women and made them feel like the world of investing is ‘not for them’.
And of course, nothing could be further from the truth.
We recently interviewed Barbara Stewart, an expert in women and finance who has spent the last decade disproving negative and outdated messaging around women and money.
Barbara has interviewed over 800 women around the world about how they invest. Based on her unique research, she has confirmed that the majority of women invest in equities or stocks (via individual stocks, funds or exchange traded funds) which are considered a ‘risky asset class’.
Therefore rather than label women as being risk averse, it is far more accurate to refer to women as risk aware.
Women may take longer to make an investment decision, but that is because as women we are ‘meticulous about doing our homework’, to quote Barbara. Once women make a decision to invest they commit their money and tend to stick with it.
The implications in terms of changing this fundamental perception of women investors, is that the industry must rethink its approach in order to be more welcoming to women.
And as women, because we are exposed to far more financial risk over the course of our lives than men, the urgency to engage even more around our money is critical and the need to maximise returns on an ongoing basis is non-negotiable.
I interviewed Barbara for The Purse Podcast and it was an absolute privilege. You can also listen to it here. Thanks to Barbara’s work the outdated messaging about women and money continues to change.
I’d like to wish you a very Happy International Women’s day from Copenhagen! I’m here for Barbara Stewart’s keynote on her latest research which I will share with you.
I hope you enjoy this week’s newsletter. Until next week!
Jana #powerofthepurse
The Big Picture
Global markets and economy news, trends and indicators
Covid-19 (coronavirus) is triggering fears of a global recession.
The FTSE 100 fell by 3.5% in another wave of selling on Friday; it closed at the weakest level since July 2016. It has shed at least 12.5% of its value in the last fortnight.
In the US, markets have also dropped to their lowest levels since last summer.
Government bonds have rallied-in the US and UK this has driven yields to record lows (ie less than 1%).
Oil has plunged after Opec and Russia have not agreed on production cuts to address falling demand.
The US economy created 273,000 jobs last month, more than forecast.
Italy unveiled a Euro 3.6bn stimulus package to tackle the impact of the coronavirus. The government will introduce tax credits for companies that reported a 25% drop in revenues.
The Federal Reserve (US) cut the interest rate on Tuesday by 50 points in an attempt to offset the concerns in the market due to the coronavirus outbreak. However it is possible they will make further cuts of 25 points later this month.
The incoming governor for the Bank of England (BoE), Andrew Bailey said that:
Markets shift to bet on UK interest rate cuts:
Markets have moved to fully price in a 25 points reduction to 0.5% by the BoE’s next policy meeting on March 26.
Goldman Sachs warned that the coronavirus could tip the UK to a recession.
Looking Ahead in 2020
Outflows from global equity funds accelerate:
Europe-focused funds have had their worst week since July 2016
$23bn in outflows as a result of the coronavirus
Fears of global economic impact mount.
Investors and policymakers anticipate more harm to the global economy than expected.
The first Budget of the Boris Johnson majority government is due March 11. This is what we can expect (including):
An increase in the threshold for paying National Insurance. This save workers earning more £12, 600 approximately £100 a year.
Better worker’ rights to protect on zero-hour contracts and maternity leave.
The previous proposal to reduce pension benefit for people earning £50,000 from 40% to 20% has been ‘taken off the table’.
The New Chancellor is likely to scrap or cut back on entrepreneur’s relief.
In the Spotlight
Is there a topic you'd like us to Spotlight? Please email jana@jointhepurse.com or tweet @jointhepurse
Why do central banks cut interest rates?
Central banks lower interest rates in order to stimulate economic activity. Lower financing costs can encourage more borrowing and more spending.
Conversely, if the economy is experiencing too much growth (overheating) central banks can raise interest rates in order to slow inflation. Higher interest rates curb consumer spending.
Controlling interest rates is often referred to as monetary policy.
During uncertain times, as we are experiencing at the moment, investors rush to safer assets: they move their money out of equity markets and buy government bonds and gold.
(Source: FT, Investopedia)
Have You Seen This?
Female-focused news, reports, research, campaigns
More women in the UK investing in buy-to-let properties
Women now account for 47% of the 2.5 million buy-to-let investors in the UK up from 46% the year before, narrowing the gender gap in the investment class according to a report.
This is in contrast to the gender split across other asset classes:
In cryptocurrency women represent 8.5% of investments.
In stocks and shares ISAs women account for only 43%, owning 957,000 shares ISAs compared with 1.2 million men.
Coutts partners with BGF for female venture capital fund
‘Announcing that Coutts is working with BGF to develop the UK Enterprise Fund, is a pivotal moment for the Rose Review and represents the great progress made in addressing the biggest barrier to women led businesses, that of access to capital.’
1 in 5 FTSE 350 firms warned about gender diversity
The Hampton-Alexander review has written to 63 companies asking how they plan to improve gender balance.
What We’re Tracking
Female-focused products or services, crowdfunding campaigns, start-ups led by female entrepreneurs & investment, research
Ada Ventures invests in Bubble which connects parents with babysitters:
Read Check Warner’s article on Medium about why Ada Ventures decided to invest.
Bubble provides evening sitters, day time help and after school care.
Money Habits of the Week
Do you have a money habit you would like to share with us? Tweet @jointhepurse
As the end of the 2019/2020 tax year draws near, you still have time to maximise your ISA allowance and pension annual allowance.
There is a £20,000 allowance for ISAs per year and a £40,000 allowance for your pension (salary dependent).
If in doubt, do reach out to a financial planner or investment advisor. You still have time.
Caught Our Eye
Digital tools for managing your money and investing
Money Farm: provides investment strategy, portfolio management, personal guidance and advice, available via their online platform and on their mobile app.
Select a stock & shares ISA, a private pension, pension drawdown, and/or open a general investment account. They also provide access to a personal adviser.
See their website for fees.
(Disclaimer: this is for information purposes only. And full disclosure, the Founder is a customer).
We’re Applauding
Female role model in politics, finance, business, money, or investment
We are celebrating Barbara Stewart: an expert on women and finance, a researcher, author and keynote speaker. We had the privilege of interviewing Barbara for The Purse Podcast (click here for the podcast).
Ten years ago Barbara saw a need to challenge outdated financial industry stereotypes and share positive messages about women and money.
Today, Barbara is recognised worldwide as one of the leading researchers in women and finance. Her Rich Thinking® global research papers quote smart women from all ages, professions and industry.
Barbara is a keynote speaker for CFA Societies, banks and stock exchanges around the world, and conducts interview driven research for financial institutions in Canada and globally.
What We’re Reading
Principles for Navigating Big Debt Crises: The Archetypal Big Debt Cycle: Ray Dalio, one of the world’s most successful investors, ‘shares his unique template for how debt crises work and principles for dealing with them well’.
If you want to understand why the financial system occasionally breaks down, and what central banks and government should do about it to resolve systemic financial crises -this book is worth a read.
Coffee Break? Read This
Designer creates guessing game about incredible women who have changed the world
We still have a problem with female authority:’ how American politics sets a trap for American women
We’d love to hear from you. Do you have feedback? Have we missed anything? What would you like to see more of? Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.
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