Sallie Krawcheck, the founder and CEO of digital investment platform Ellevest, revealed the biggest mistakes women make when it comes to investing and what they’re getting right.
“Most of the articles you read about mistakes people make in investing—falling in love with the stocks, over-trading, panicking—are the mistakes guys make. In fact, the mistakes women tend to make is not investing and thinking, ‘I need to understand more.’ We all like to get As, right? So, ‘Really before I invest I want to understand everything about it.’ And as a result, we don’t,” Krawcheck said.
Another mistake women tend to make is taking on too little risk. The reality is women can probably take on more risk than men.
“We tend to take on too little risk when we invest because we tend to be quite risk aware,” she said, “The fact that we live longer, which we take into account at Ellevest, can mean that we can take on a bit more risk in order to get those returns.”
What women get right when it comes to investing is “setting it and leaving it and not messing with it,” Krawcheck explained.
“The other thing we are seeing at Ellevest … amongst our clients is about 75 percent are setting up recurring deposits and that’s so smart,” she said.
She continued: “[Women] tend to think of investing as one and done. We tend to hear from people, ‘What if I invest at the wrong time. I think the market is too high.’ Like we know. But put that aside, what makes a lot of sense is to invest some now, the next month, the next month, the next month. So sometimes you’re buying high, sometimes you’re buying low, but it evens out over time to get you those market returns, which historically have been quite better than leaving money in the bank.”
Earlier this month, Krawcheck’s Ellevest—which is for women and led by women—completed a $9 million fundraising round with some really powerful female backers like tennis pro Venus Williams and business big-shot Mellody Hobson.
Julia La Roche is a finance reporter at Yahoo Finance.