The Risk of Safety

Safe*ty - the condition of being protected from or unlikely to cause danger, risk, or injury.

One day the stock market is up, the next day the stock market is down. You might be tempted to run for cover, and to seek more stability by holding more of your assets in cash in the bank....the proverbial "cash under the mattress." Keeping more money than you need in cash provides safety, you tell yourself.

But you would be wrong. Yes, the value of your money in the bank may stay stable, but your expenses do not. Over time, the cost of the things and the experiences that enhance your life will increase with inflation. By keeping too much money in supposedly "safe" assets, you are actuallly losing purchasing power.

This is an even bigger issue for women. According to a survey by BlackRock, women keep a full 71% of the assets they control in cash. When you pair this statistic with their lower on average earnings, and greater life expectancy than men, it's no wonder that women are 80% more likely to be impoverished in retirement than men.

So, what's a woman to do?

Control what you can. Focus on the things you have more control over, rather than the things you don't. Save more, spend less. Minimize your investment fees and taxes. 

Proceed with caution when being sold high priced products like annuities for "safety". After fees, many annuities do not make sense for most investors.

Educate yourself. Invest for the long term. Understand the power of compound interest, and the value of diversification. Women need to thoroughly understand the risks they are assuming. Research has shown that, once they do, they outperform the men whose overtrading due to overconfidence was less successful in the long term!

Are you taking enough risk in your investment portfolio? Please reach out, and we can review it together.

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