I get many questions about how to invest in this volatile market. I recently read an article about this topic on an intriguing new site, Vitamin W. The piece, by Janet Hanson, founder of 85 Broads, shares her insight on women and investing. I loved her points and agree with most of them.
The Tipping Point For Women: Invest In What You Love
By Janet Hanson
The debate rages on regarding why more women aren't on corporate boards and in the C-Suites of major companies across America. My guess is that the debate will continue for several more decades unless women realize they have the power to change the outcome today.
Women are brilliant consumers-- they know how to compare brands, and they know what they value. In essence, they are "value consumers.” When women buy clothes, books, toys, and appliances, they are "purchasing." Why not change the word "purchasing" to "investing"? If women thought of themselves as investors, then perhaps they would be more inclined to confidently invest in the shares of companies whose products they love to buy.
How often do you hear women say "investing is risky" or they are “afraid to lose money." That is absurd. Take out your last credit card bill and make a list of all the products you purchased. What is your investment return on your purchases? The answer is zero, because you own the products, not the company's stock. Let's say you spent $100 on a new pair of Nike running shoes because you're training for a marathon. If you love the product, why don't you buy the stock? Symbol: NKE. Love shopping at Whole Foods? Instead of just filling your grocery cart with food, why don't you buy the stock? Symbol: WFM.
Until women realize that they must turn their purchasing/consumer savvy into investment savvy, they are, in my humble opinion, pretty much doomed. Every guy on the planet knows this. If you don't invest for the long-term and create wealth, you have no power. Women have yet to figure this out. If women aren't equally represented in the boardroom or in the C-Suite, they should ask themselves one question: do they ever refer to themselves as investors? Everyone on the planet knows that the term "investor" connotes wealth, power, privilege, and intelligence. Run a search on the word "investor" and see what you find -- are the synonyms words that are commonly used to describe women?
As long as women "consume" they will be thought of as "consumers." Companies will earn billions in profits as long as women continue to binge at the product trough. If women could cut their consumption of goods by 10% a month and invest that money in companies whose products they love, they would start to change the way men view them. It is 100% within their power to create the tipping point that has alluded them for decades -- all they have to do is think of themselves as savvy investors. Believe me, this is not rocket science.
Think about it: if you trust yourself to make wise product purchasing decisions, why does the thought of investing in the very shares of companies whose products you love seem so scary? There is no guarantee that you won't lose money on your investments in these companies but then again, look in your closet -- your shoes and skinny jeans have no chance of appreciating in value!
Smart investors know how to minimize risk and maximize gain. If you consume (spend money) on products, you're just a spender, not an investor.
The goal: Invest in shares of companies whose products you love.* And when people ask you what you do, tell them you're an investor. Don't be surprised by the look of admiration and respect on their faces. It's time women created their own tipping point -- they don't need guys to make it happen for them. If millions of women across the U.S. invested their collective millions (billions?) in shares of companies they love, they would create a powerful new paradigm. If you want to feel empowered right this second, add "Investor" to your bio or resume. And then really become one. As NKE says, just do it.
**Buying what you love is a successful investment strategy. In the summer of 2005, 11 interns worked at our asset management firm, Milestone Capital. We bought stock in companies we loved such as Coach, Steve Madden, and Whole Foods. Each stock rose during those seven years, from June 1 2005 to May 30 2012.
50 shares of Coach (COH) purchased for $1478 would be worth $3505 today.
50 shares of Steve Madden (SHOO) bought for $252 would be worth $2050 today.
50 Shares of Whole Foods (WFM) purchased for $2750 would be worth $4467 today.
Janet Hanson is the CEO and Founder of 85 Broads, a global networking community of 30,000. Hanson worked at Goldman Sachs, where she became the first woman to be promoted to sales management. Following her 14-year career at Goldman Sachs, Janet founded Milestone Capital Management, a $2 billion institutional money management company. From 2004 to 2007, Janet was a Managing Director and Senior Adviser to the President of Lehman Brothers. She is a graduate of Wheaton College and Columbia Business School.
Janet is a member of the Kellogg Center for Executive Women’s Steering Committee and the Forbes Executive Women’s Board. Hanson has also served on the Board of Trustees of Wheaton College. She is an Associate Fellow of Pierson College at Yale University and serves on the Advisory Board of The Center for Work-Life Policy’s Hidden Brain Drain Task Force. She has received a number of awards and honors, including an honorary degree from Middlebury College in 2007.
Which Investments would you love to make and why? Comment below.