With an ongoing pandemic around the world, many investors have turned their focus towards stockbroking, stock market investments, and mutual funds. Recently conducted surveys by many investing professionals suggested that the participation of women in stock markets has comparatively increased as compared to pre-pandemic terms. There was a whopping 20 percent increase in the graph. Though we have seen a spike in the graph, the numbers of women participants are nowhere close to men in the share market of India.
The survey reads out that women form approximately 20 percent of active trades in India. Around 70 percent of women were observed to be first-time investors, whereas 35 percent of them are housewives.
In an era of gender equality in every sector, why is there a huge financial disparity between male and female investors in the stock market? In this blog, we are going to look at some of the factors why women lack investments in stock trading and why is it important for women to invest in stock markets?
The reasons why women refrain from investing in the stock market
The stock market is believed to be controlled and dominated by men, which leads to a huge absence of women in the stock market industry. As we can see the world has undergone a sea change in the last few decades with an industrial revolution, but still we can observe women refraining from investing in equity markets. The reasons can be listed as follows:
1. Lack of Financial Availability and Stability
Stock market investment is a risk-taking venture and once done correctly can repay greater benefits. However, the primary necessity, which women lack the most, is the ability to invest in the stock market. Women`s engagement in investing has dropped as a result of socioeconomic conditions and other reasons such as employment and income inequality; around 20% of women will be unemployed by 2020. Thus such factors lead women to suffer from investing in stock markets and equity debt.
2. Lack of Stockbroking Knowledge
The literacy rate of India is said to be around 75-77 percent, but despite achieving formal education, women are shown to lack knowledge about the stock market of India. Women aren`t as knowledgeable about stocks as men are, which can be linked to gender role bias in transferring such knowledge or even a lack of opportunity to explore the topic of stock market trading.
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3. The Teaching of Safe Investments
Though equity is the best-known way to gain profit, women restrain from equity fund investments. This is due to their mindsets being conditioned to invest in safe fixed deposits and post office recurring deposits rather than risking and gaining large profits in equity bonds.
The industrial revolution in the late ’90s opened various investment opportunities and the advancement of technology brought a huge transfiguration in the role of women. The women started excelling in their academics and started participating in various fields like politics, defense, sports, the IT sector, and especially businesses and entrepreneurship. This revolutionized the role of women and women started researching new ways of investment.
Let’s look into some of the reasons why women have to delve into Investment in financial markets
Uneven wages and Pay-cuts
The brutal wage cuts of around 20-30 percent during the pandemic that are continuing even today are taking a huge chunk of income from families. Such a substantial chunk of income generally made up for the savings of the working class has bought a huge dent in their monthly expenses. This has opened and broadened perspective on the importance of investing.
Equal financial responsibility
Before the pandemic hit the world, the average Indian woman could bear to have an essential supplier with an auxiliary compensation that was lesser than their partners. However, every penny became indispensable to run a household during these difficult times, highlighting the need for the same amount of pay to the table as their accomplices to earn enough to pay the bills. Stock trading and mutual funds provided women a great opportunity to earn as the stock market was soaring even in these difficult times.
Drop-in fixed deposit interest rates
The lofty decrease in the paces of revenue given by FD and RD accounts in India raised an immense worry for everybody since the interest rates would scarcely keep up with the rate of inflation. As women have been one of the primary participants in holding fixed deposits and recurring deposits due to their principal safety factor, they had to find other mediums of investment. Stock market investments and equity trading has been the easiest path to earn great profits in a shorter period of time.
When it comes to investments, women need to be very proud of themselves as they are saving and preparing themselves to face the stock market challenges as well. By investing their time in educating themselves about investment decisions, creating a diversifying portfolio, women can take control of their finances with confidence and stop relying on anyone.