Inspirational Investing (2023 edition): What matters in the world of investing – by women, for women

Contents

Foreword

Introduction

Acknowledgements

Part 1: Women are Different

Investment Indecision: It’s Psychological, not Logical with Nuala Walsh

Money and Menopause with Danni Hewson

The Impact of Health and Trauma on Investing with Nikki Ramskill

Part 2: Investment Planning

What does an investor look like? with Emilie Bellet

Investment companies: the Alternative Route with Annabel Brodie-Smith

The Biggest Life Event that No One Talks About with Blair duQuesnay

Trusted Companions with Claire Dwyer

Preparing for Later Life as a Self-Employed Woman with Charelle Griffith

Aftercare and your Assets Following a Divorce with Lottie Leefe

ESG – One Acronym Too Many? with Becky O’Connor

Taking More (and Less) Risk With Your Money with Moira O’Neill

Human Capital with Lazetta Rainey Braxton

Part 3: Money Stories

Championing Diversity: an interview with Stephanie Carbonneil, Allianz Global Investors

Guided by Governance: an interview with Lesley Dunn, Sally Greig and Lucy Isles, Baillie Gifford

Shareholder Stewardship: A Saints Approach: an interview with Dame Mariot Leslie

Share Power: an interview with Merryn Somerset Webb

Investing: If Not Now, When?: an interview with Kalpana Fitzpatrick

Investing Through the Lens Of Longevity: an interview with Alexandra Bause

Democratising Finance: an interview with Jillian Godsil

Bright Futures: an interview with Julie Flynn

Part 4: Useful Resources

Resources Directory

A–Z of Investing

A–Z of Crypto

Connect with other Female Investors

Partners

Publishing details

Foreword

Many factors play a role in determining the level of financial security we achieve throughout our lives. These range from family background, our personality, the skills we possess and the education we receive; to the macroeconomic backdrop, the career choices we make and the new family units we create.

For women, every one of these things matters much more than they do for men. I can say this with absolute certainty because, if it weren’t true, men and women would enjoy equal outcomes in later life – and the fact is, they don’t.

Women on average end up with fewer savings, smaller state pensions and meagre privately accumulated pension pots; and they are more likely than men to have zero pension wealth.

The simple reason for this gender gap in finances is that it is almost impossible for the same outcome to be achieved when one group is hindered at every turn. None of the hindrances behind women’s inability to stash away as much as men will be a surprise to anyone – they are to do with taking on more of the burden of caring for children and elderly parents, which often leads to women choosing part-time and low-paid (but flexible) work, and putting their children first in a divorce (choosing the family home rather than a pension split). Women are more likely than men to lack peers who invest, and may be more reluctant to take risks with their pot of capital.

Women broadly are left in a position where they either cannot afford to save and invest for their futures, or save and invest far less than men of a similar age and at the same stage of their working lives.

Happily, the lid has been lifted on the generally dismal state of women’s finances, particularly in later life, and the reasons behind it. Understanding why and when women are disadvantaged and how financial security can slip from our grasp at any point – Snakes & Ladders style – has been enormously helpful in alerting all of us to the risks of ignoring our own financial security even as we care for our nearest and dearest. Many of these themes are explored across this book. No one should be driven into poverty simply because of their gender.

Yet for all the progress that has been made to balance later-life outcomes between men and women, the Covid-19 pandemic and the cost of living crisis that followed it have impacted women’s ability to build financial resilience. Inflation, which for a very great number of people has only ever been a theoretical concept, has returned with a vengeance to pulverize household budgets, further damaging women’s ability to invest.

Many women are considering dipping into their savings and/or cutting back on their investments, or have already done so, as they struggle to make ends meet. But research shows that cutting pension contributions by £150 a month for just one year could reduce a pension pot’s final value by more than £3,000, and by many thousands more if the full contribution is not resumed again.

What these hard times should be teaching us is that it is more imperative than ever to build ourselves solid nest eggs that can deliver a lasting stream of income in later life, and to hold emergency funds that can cushion us from disaster. Having cash savings is essential but it is not enough. Women need to ensure that household income is being used to protect their futures too, not just their partners’. And women need to invest because this is the only way that most of us can make our money grow.

We all owe our future selves the right to a financially comfortable existence; and so we must take on that responsibility, because no one else will do it for us.

Don’t think of investing as something that other people do. Ask yourself: why do other people do it? Investing in the stock market involves taking risk, but that risk can be reduced by making sure your investments are well diversified and by committing to staying in the market for as many years as possible (at the very least five and preferably 10). That way you can sit out any downturns. Ups and downs in investing are a completely normal feature of the investment and business cycles. Downturns do not mean you have lost a chunk of money forever – unless you cash in and crystallise the loss. Markets recover from down periods and often it is at moments of despair, when prices have fallen, that the best opportunities to invest are created. So don’t let fear prevent you from staying focused on your long-term objectives.

The brilliant and insightful essays in this book should be all you need to get started, or to give you encouragement to keep going. They will open your eyes to barriers you may not realise stand in your way and explain how to overcome them. Each writer brings a huge wealth of knowledge, experience and authority to bear on her subject, and together the chapters and interviews form a clear path that every woman can follow to secure her own financial security. This book, with its wealth of guidance and resources, is essential reading for every woman.

Rosie Carr

Editor, Investors’ Chronicle

Rosie Carr

@CarrRosie

Introduction

It’s worth remembering that it is often the small steps, not the giant leaps, that bring about the most lasting change.

— Queen Elizabeth II – Christmas broadcast, 2019.

I started writing this introduction on 8th September 2022, the day our Queen, Elizabeth II, died after 70 years of service as monarch. With the focus of this book being on inspirational women, it’s hard to ignore the inspiration Queen Elizabeth provided, not only as our monarch but also as an investor.

The economy and markets have transformed beyond recognition during her reign, but despite some challenging market conditions Queen Elizabeth built a portfolio of investments and accumulated an estimated wealth in the region of $500 million. In addition to the Crown Estate, which is owned by the reigning monarch, Queen Elizabeth’s personal investments included equities, art collections, jewellery, property and even a stamp collection worth a whopping £100m. This impressive portfolio is a great example of a diversified portfolio and something to aspire to.

Queen Elizabeth’s death comes at a tumultuous time: two years of Covid, an ongoing war between Ukraine and Russia, social unrest fuelled by industrial strikes and an inflationary spiral in progress. Just this week, mortgage rates have hit a fresh high and inflation is at its highest in 40 years. Things are looking bleak as the Bank of England is forecasting a further increase to 11% and Citibank analysts have made predictions of up to 18%. At the time of writing, Liz Truss – the second Prime Minister of 2022 – has been succeeded by a third, Rishi Sunak. By the time you read this, we’ll have a better idea of how everything is working out, but amid so much uncertainty, there is one thing we can be certain of: there has never been a more crucial time to put your money to work.

This book follows our 2022 edition, in which we explored why fewer women are engaged in investing for their future; the fight for more of a female presence in the financial services industry; the still-unresolved gender gaps in finance, from pay to pensions; and why now is the time for more women to take investing seriously. In this 2023 edition, we start by looking at the psychology behind investment decisions, followed by the impact women’s health can have on investing. The second part of the book shares thought leadership from some of the brightest minds covering topics including risk, divorce, environmental, social and governance (ESG) and alternative investments. In the third part of the book we interview some leading female investors, sharing their insights and learnings. The final section has links to some resources you might find useful and an A–Z glossary of investment terms, including a specific crypto A–Z. We’ve tried to avoid jargon in this book, but hopefully these explanations will help you with terminology you might spot elsewhere.

Since last year’s edition of Inspirational Investing, progress has been made towards more women taking control of their financial destinies, but there is more work to be done. The 2023 International Women’s Day theme is #EmbraceEquity, and each of us has an opportunity and responsibility to drive forward this change. The IWD website explains the intention behind the theme with the following words:

We can all truly embrace equity.

It’s not just something we say. It’s not just something we write about.

It’s something we need to think about, know, and embrace.

It’s what we believe in, unconditionally. Equity means creating a fair and equal world.

In order to create positive change we must believe that equality is possible, challenge gender stereotyping, biases and discrimination and drive towards inclusion.

For this year’s edition we chose a butterfly as our cover emblem. This got me thinking about butterflies and metamorphosis. Then it came to me: the butterfly effect. This is the notion that everything is interconnected, such that something small can influence a much larger system and have a greater impact – a concept represented by a butterfly flapping its wings and causing a typhoon. At the start of this introduction, I included a quote from Queen Elizabeth II – flip back to read it again. By reading this book you are able to instigate change – a change that might seem small, perhaps in your own life, in the lives of others or on society. But don’t underestimate your power. Collectively we can act as the catalysts for lasting positive change.

I hope these pages inspire you to flutter your wings, and together we can cause a typhoon.

Amanda Taylor

@amandainvests

@amandartm

masterinvestor.co.uk,

investology.org

Acknowledgements

Thanks to everyone who has been involved with Inspirational Investing so far – both this year’s edition and al so the 2022 
book which paved the way for us to launch this new edition. Without your help and support, this book wouldn’t be here to inspire readers to take the first or next step on their investing journey. Th ank you all.

Thank you to Harriman House for their continued support of this initiative. Special thanks to Sally Tickner, Myles Hunt, Nick Fletcher, Tracy Bundey, Lucy Scott and the wider team – I appreciate all your hard work making the book happen.

To our contributors, a big thank you for contributing your time and expertise:

Alexandra Bause, Emilie Bellet, Lazetta Rainey Braxton, Annabel Brodie-Smith, Stephanie Carbonneil, Rosie Carr, Lesley Dunn, Blair duQuesnay, Claire Dwyer, Kalpana Fitzpatrick, Julie Flynn, Jillian Godsil, Sally Greig, Charelle Griffith, Danni Hewson, Lucy Isles, Lottie Leefe, Dame Mariot Leslie, Rebecca O’Connor, Moira O’Neill, Nikki Ramskill, Nuala Walsh, Merryn Somerset Webb.

To our publishing partners, Baillie Gifford and Allianz Global Investors, thank you for your support in enabling this project and getting the books into the hands of as many readers as possible. In particular, a special thank you to Sarah Robertson and Michelle McLeod at Baillie Gifford; and at Allianz Global Investors, Katie Ramsden and Oliver Lago.

Amanda Taylor

Editor, Inspirational Investing

January 2023

Part 1: Women are Different

Investment Indecision: It’s Psychological, not Logical

with Nuala Walsh

Nuala Walsh

@nualawalsh01

mindequity.co.uk

Nuala Walsh is CEO at MindEquity, a non-executive director and behavioural scientist. She is also an award-winning former chief marketing officer at Standard Life Aberdeen.

A founding director of the Global Association of Behavioural Scientists, appointments include president of Harvard Club of Ireland; trustee at The Innocence Project; council member at The Football Association; and former vice-chair at UN Women. Today she writes about decision science for HBR, Forbes, Psychology Today, and Inc.

It’s no surprise that emotions of fear, greed, hope, anxiety or regret-avoidance shape indecision. Both male and female investors want to protect their wealth and generate income, but sometimes perceive the decision as too final and payoffs as too uncertain.

For decades, policymakers, regulators, and financial organisations have evaluated patterns of investor behaviour to deter extensive borrowing and make investing more attractive. Yet investing indecision prevails, especially among women and minority groups. Popular explanations centre around a preference for short-term gains, variations in risk profiles and financial illiteracy. Regulators blame choice proliferation, exclusionary jargon-filled language, and