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- Emotional attachments breed loss aversion, while a lack of diversification also exposes women to losses. These lessons teach us about our risk-taking behaviours and preferences.
- Gender differences in decision-making are apparent, with men tending to make quicker decisions while women often seek input from family or friends. The male-dominated nature of the finance industry can be intimidating for women, but achieving a more balanced representation and encouraging open communication can help women overcome these barriers.
- It is equally important for women to empower themselves through acquiring knowledge in personal finance and investing.
According to the 2023 Endowus Wealth Insights Report, nearly 70% of surveyed female investors in Hong Kong expressed the desire to invest more, with the goal of ultimately attaining financial independence.
To find out about how women can plan their investment and retirement better, Endowus co-hosted an in-person event with 100 Women in Finance and 100WFintech, with sponsorship from The Executive Centre, to learn the personal investment journey from esteemed panellists including
Joining us as panellists were:
- Daisy Ho, Asia Pacific CEO, HSBC Asset Management
- Brenda Hou, Head of Global Partnerships & Clients Solutions, Growth Markets, CFA Institute
- Yvonne Leung, CEO, Ant Bank
- Taosha Wang, Portfolio Manager, Fidelity and Author of “Techonomics You Should Know"
They all shared their personal investing stories and challenges working in the financial world as a woman, and inspiring us with how they have stayed the course and forged their own path in a male-dominated industry.
#1: Know who you are and what your goals are
Investing is a personal journey. Each of us has our own investing persona, and by understanding ourselves and learning from others, we can support and assist one another.
Steffanie Yuen, Head of Hong Kong at Endowus, who moderated the panel of women investors, says: “From my own stories, I think people will have their first taste of loss to really “graduate” and realise that “Finally I've learned my lesson.” When I meet younger clients I actually do encourage them to try different things because you have to try different things to realise what exactly is right for you.”
She observed through the risk questionnaire we all have to fill out when starting to invest. “In my previous job, we've looked at data to find that a lot of us when we fill out the the questionnaire, we might think we are very aggressive, confidently thinking that we could handle a 30% drawdown. On a digital platform, it's quite easy for us to see when you actually have that 30% drawdown–or even just a 10% drawdown, those “aggressive investors” immediately panicked and then started calling to know what's happening.”
Steffanie believes that sometimes we might not know ourselves as much as we think we do. It's going through this experience to understand what the risk level we could and we wish to tolerate. We can then curate a portfolio that aligns perfectly with our individual needs and preferences.
Read more: Goal-based investing and why it matters
#2: Break free from emotional attachments
In her twenties, Taosha Wang, a portfolio manager at Fidelity International, landed in her new home, Hong Kong. The city's vibrancy energised her, but her investing journey painted a different picture—a tale of excessive caution and self-doubt that lacked the same vibrancy she admired in her surroundings.
“If you tell me that, if I invest in one thing, I could lose HK$20,000–That's a handbag to me. Emotionally, I didn't have that pain threshold and I don't want to lose a single dollar. On the other hand, I wasn't incredibly confident with my ability to pick the winner.”
Now, as a seasoned investor herself, with a daytime job as a portfolio manager at an asset management firm overseeing a staggering US$700 billion in assets, Taosha has grown her confidence over the years. She says: “As I grow as an investor, I start to gain more confidence and also to rationally think about risk budgets.”
“You don’t mix what you have in your investment account with what, in your mind, is converted into the things that you could buy. Because that is the way to get emotionally entangled with the money invested. With that, over time, I become more comfortable taking risks.”
Emotional attachments breed loss aversion. It is difficult to invest when the market is already up, because of a feeling of a perceived loss. In the same vein, the fear of loss is a bias, where real or possible loss is perceived as more severe than an equivalent gain.
Read more: Investing when the market has run up is hard, but here's what helps
#3: Diversification
Volatility in the Hong Kong and Chinese equity markets has pushed investors to realise the importance of diversification. With over 20 years of experience in the asset management industry, Daisy Ho, Asia Pacific CEO, HSBC Asset Management has a story to share and that’s about diversification.
“I think this is more our parents’ generation. They talk about two things in Hong Kong: buy a house (property), and second is buy HSBC stocks for the dividend.” About this, there was one incident she still remembers very vividly now. “That's like a big scar in terms of how I invest,” in her own words.
“I remember I was really upset when the financial crisis hit, at the time when I bought a house for myself. That was the pressure for the first time in my whole life. That was my biggest investment. Think about the leveraging effect because of mortgage so that is something that I learned how to diversify and how not to like just rely on one asset class.”
Read more: The power of diversification in investing
#4: Don't forget the strength in you
Research and data show traits essential for investment success, such as patience, discipline, and a long-term perspective, are more commonly found among women investors. To a certain extent, these characteristics overlap with the style of the investment mogul Warren Buffett.
Daisy from HSBC Asset Management resonates with those studies and says: “This is coming down to our confidence level and conviction, and our DNA being more conservative. A second characteristic we can see from women when it comes to investing is that women’s decision-making process is longer than males. The third element is that women tend to want to talk to people and get help, support, and consultation, as they go to financial advisors, to your friends or husband.”
“Finance itself can be quite intimidating to women, because of the subject itself and there's a lot of myth about it. Meanwhile, the industry is dominated by males. That's why a lot of women tend to shy away from investing.
Knowing the behavioural differences between men and women, Daisy thinks: “Think about especially for your retirement planning. If you stay long-term and do not make a lot of market-timing switches in your investments. That is not a bad thing, provided you have a very diversified portfolio. The only thing that I would remind is a lot of we invest too conservatively then that is not good enough for your retirement,” says Daisy, who also reminds women to factor in the generally longer life expectancy in retirement planning.
She believes, being less speculative and looking at investing with a longer-term perspective, is beneficial for women investors.
Read more: How Warren Buffett invests like a woman and wins big in the market
#5: Ask the right person the right questions
“I was much influenced by the environment and my peers. Lucky enough that there was no crypto at that time,” says Brenda Hou, Head of Global Partnerships & Clients Solutions, Growth Markets, CFA Institute. Starting her career at a bank, she was surrounded by enthusiasts in real estate investments. Back then, when interest rates had not refreshed the pain for many in terms of cost of capital, many took advantage of the low borrowing cost on mortgages, and so did Brenda’s then-colleagues.
She was encouraged to buy flats and recalled how it was: “It’s just as simple as that. I don't even think about whether I can afford that. I was lucky enough to still afford a flat with the support of my little bit of savings.”
“After a few years, I was very happy with a very small gain, because I was still very young. At a 10% gain, I think: ‘Yes, I'm going to cash out.’ So I sold that and then you know what happened: When you have cash, you go and invest in the stock market.”
Her key learning is not to hesitate in investing, but also the importance of finding the right individuals to seek advice from. She cautions against relying solely on close friends and acquaintances as investment advisors, as they may not possess the necessary expertise or experience in the field.
Being the only female chief executive across virtual banks in Hong Kong, Yvonne Leung, CEO at Ant Bank, emphasises the significance of acknowledging our limitations and seeking assistance. This applies to both the workplace and the realm of investing.
She says: “I don't have the coding background but I have the ability to talk to people and communicate. One of the things that it’s always easier for females in the workplace is that we don't feel bad when we need to raise our hands and seek help. That’s very important, particularly in the Fintech landscape, in a startup, and in a virtual bank.”
Reiterating the sentiments, Brenda from CFA Institute emphasizes the importance of women gaining a solid foundation in investment knowledge before taking the leap. She says: “I don't really want people to feel that they should be embarrassed by not understanding the terminologies in investing.” She also agrees that women are very good at asking questions and seeking help. Empowering ourselves with knowledge is equally important, and she firmly believes that women are highly motivated learners.
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