2 powerful ways to boost your investing confidence as a divorced woman

Divorce can knock your self-esteem, especially as a woman. Learn two powerful ways to boost your investing confidence as a divorced woman here.

For women, divorce can bring up many insecurities. As you transition into this next chapter, you may find that your confidence has been knocked in certain areas of your life – and money may be one of them.

Indeed, if you are used to dealing with your finances alongside a partner, or even delegating most of the financial responsibility to your spouse, it may now be very daunting to “go it alone”.

This is especially true when it comes to the more uncertain aspects of finance, such as investing.

Yet for many people, investing is one of the most important and effective ways to grow a pot of wealth you can rely on later in life. And if you’re newly single, building your own financial foundation is even more important.

If you feel nervous to invest as a divorced woman, keep reading to find out two powerful ways to boost your investing confidence.

1. Take a long-term view of your investments

Research by Aviva (11 March 2024) reveals that 37% of women do not invest compared to 24% of men.

When the women who did not invest were asked why, 18% thought the risk was too high, 10% said investing is too complicated, and 6% didn’t know where to start.

If these statements echo your own fears about investing, a helpful way to boost your confidence is to remember that markets always have, and probably always will, fluctuate. Large-scale events like the war in Ukraine can have a huge effect on markets, but in truth, there are thousands of factors that could influence the performance of a particular stock or fund.

Worrying about the value of your investments dipping in the short term is normal, but it is unlikely to get you very far as an investor. Yet you might still be wondering: “If my investments fall in value, won’t I lose money?”

In the short term, the value of your investments might go down, which means if you decided to sell them there and then, you’d “crystallise the loss” – in other words, you’d lose money.

But if you hold firm and take a long-term view of at least five years, or ideally more than 10 years, you may find that despite short-term fluctuations, your money grows over time.

Look at any long-term index chart using Macrotrends, and you’ll discover that despite fluctuations throughout the years, most stock market indices have seen overall positive growth.

Time in the market is more important than timing the market. So, if you’re a woman who is worried about losing money to investments, taking a long-term view may boost your confidence significantly.

2.  Design a portfolio based on your unique needs

If you’re new to investing, designing a portfolio based on your unique needs could make you feel empowered to invest over the long term.

“Investing” is such a broad term, when in fact, there are plenty of factors that require much more specificity, and that’s where you come in. These include:

• Your attitude to risk. Most investments carry some risk, but different asset classes carry varying risk levels. For instance, dividend-paying stocks are typically seen as “low-risk” because the yield is predictable, whereas high-yield bonds could be more lucrative, but also carry a significant risk of capital loss. Working out your attitude to risk means you can build a diverse portfolio that suits your mindset and your goals.
• Your desired time frame. If you are set to retire in 10 years’ time, you might set a decade-long time frame for your initial investments, so you can draw from them when you stop working. Alternatively, if you plan to invest on behalf of the next generation, the time frame may be much longer. Knowing your time frame can help you design an appropriate portfolio that is geared towards your specific needs.
• Your life goals. Remember that investing is not just about the money – it’s what you do with it that counts. Whether it’s leaving an inheritance to your kids, funding retirement goals, or even travelling the world, designing your portfolio based on your life goals is a sensible way to get started.

If you are a woman who is currently going through, or has already been through a divorce, now may be the time to kickstart your investing journey.

Work with a female financial planner to improve your investing confidence post-divorce

Building a comfortable financial foundation after divorce won’t always be easy, but with a confident investment mindset, you’ll be on your way to making informed, goal-oriented choices.

Plus, working with a female financial planner may help you along this road. I understand that women experience certain financial disadvantages, and that you may not have the confidence to invest smartly for your future right now – but it’s never too late to start afresh.

To learn more about how I can support you during and after divorce, email lottie@truefinancialdesign.co.uk or call 07824 554288.

As a new mummy, I will be on maternity leave until July 2024, so I appreciate your patience until I am back at my desk.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.