Investment Basics for Women

Financial expert Erin Hoffman outlines the fundamental of investing and teaches women how they can manage their money with confidence.
Erin Hoffman investing women

Investing might sound daunting right? The first step here is educating ourselves. This month I am here to give a run down on Investing 101. Once you have a better grasp on investing, you will feel more comfortable as an investor about growing your investments over time. In general, women tend to see investing with a longer-term, non-monetary mindset that balances independence, financial security, and quality of life. 

Why is investing important? 

Investing is crucial for you to grow your money for the future. Investing is just as important as savings. Let’s talk about the difference between both. Saving is important for us to have extra money available for emergencies, and to help build a better financial future, but your savings are diminished by inflation every day. All you have to do is look at the interest you are earning in your bank’s savings account.  In other words, that money will not have the same purchasing power in the future that it has today. With investing on the other hand, your money may grow at a rate greater than inflation over time and reduce inflation risk. On average, the stock market will give returns around 6-7%, which factors in inflation.  (  

There is also the beauty of compounding. You can choose to reinvest your earnings, which will grow your money at a faster rate over time. This way, our money is working for us.  

When should you start investing? 

Investing strategies usually  involve a long-term timeline, so it’s best to start investing after you have built up an emergency fund in a savings account, but after that, as soon as possible. The sooner you are able to invest, the longer your investment will have to compound and grow.  

Beginning with Risk Tolerance in Mind 

When you choose to invest your money, you should assume that you might lose some of your investment along the way, as the market rises and falls. It is important to understand your risk tolerance, which will help you understand how you feel about risk and investing your money.  


We have heard the old adage, of “Don’t put all your eggs in one basket.” The same thought can be applied to investing. One of the best ways to mitigate your risk in the market is to diversify your investments. All of your investments should not be put into one particular company, in case it goes under. Rather, you want your investment spread out in many sectors, or industries, of the market. That way, if one area of the market falls, you won’t be as worried, because other areas of the market will balance it out. One way of diversifying is to put your money in different asset classes, for instance, stocks, bonds, money markets (cash), etc. 

Rebalance Along the Way 

As our goals and timelines are changing, it is important to rebalance your account, in order to stay on track with your investments over time. As the market changes, you’ll need to rebalance to ensure all your eggs are not left in one basket.  

Not Timing the Market 

It’s key to remember that investing is a long-term strategy. You should not trying to time the market in terms of “buying low and selling high.” Rather, focus on the long-term gains, instead of the short-term ones.  


Here are some key terms to know with Investing:  

  • Appreciation- This is the increase in value of your asset. For example, your home is an asset that appreciates. You can buy it for $300,000 and then 6 years later it might appreciate to $350,000.
  • Bear market- This is when the stock market is trending downwards
  • Bull market.This is when the market is trending upwards, you can remember this by thinking of a bull’s horns- they face upwards. 
  • Diversification- This is a strategy to manage risk. In other words, the process of spreading your assets across various investments of different industries; company sizes; and even countries. 
  • Dividend- This is the amount of money that might be paid out to shareholders, and is based on a company’s earnings. It can be given out in cash or additional stocks, and can be taken as income or reinvested. 
  • Emerging market- These markets are seen in countries where the stock market Is not as developed. But might have high potential growth. 
  • Exchange- This is where trading is done, and where investments are bought and sold. One of the most well-known exchanges is the New York Stock Exchange.
  • It is important for your Financial Advisor or a brokerage firm to be a Fiduciary, which means they have a fiduciary responsibility to put their clients’ best interest ahead of their own.  
  • Inflation- A dollar today, will not be worth a dollar in the future. Inflation is the rise in the price of goods. This will in turn reduce your purchasing power. 
  • Security-A financial asset that can be traded on the stock market: such as a stock, bond, or option. 
  • Shares- When you buy a share in a company, you then become a shareholder. Share are the units of ownership in a public company. They can be bought and sold on the stock market. 
  • You might have met a Volatile person, aka someone with major mood swings. One minute they might be laughing and happy, and then next minute they might be crying. Well, a volatile stock market reacts in a similar way, in terms of the up and down fluctuations in the market. The more volatile a market is, the more ups and downs it has.



  • Bonds are loans given to a company or government by investors. Essentially, you are purchasing debt, but the company or government promises to pay interest to the investors.  
  • Stock- This is ownership in a company. For example, if you buy an Amazon share, you have one share of ownership. Often called equity or shares. 
  • Blue-chip investment- These investments have a long history of earnings and are very strong and consistent. For example, Coca Cola and Amazon. 
  • Commodity- A commodity is a raw material that can be bought and sold. A common example is metal (gold and silver), another big one is energy (oil). 
  • Cryptocurrencies- Simply put, this is a digital currency that uses cryptography to provide security. It can be made to make purchases, but is considered risky. 


 Types of investment funds 

  • ETF stands for exchange-traded fund. Think of a grocery basket, this allows an investor to purchases a wide array of securities of stocks, bonds, commodities at once. They are traded throughout the day and there are numerous to choose from.  
    Hedge fund. Hedge fund is a very risky investment. It is a pool of money used by investors and institutions who can absorb a loss from a risky trade. They have higher fees and are not as regulated, but tend to offer higher potential returns.  
  • Mutual fund. A mutual is a professionally managed investment fund that pools money from investors to purchase different investments (stocks, bonds, etc). It is allows you to be diversified in various assets at once.



  • Asset allocation- Similar to diversification, having your investments in different places balances the risk and reward by changing the percentage of assets (stocks, bonds, cash) you have invested across different assets.
  • Buy and hold investing- Think long term, this is when you buy stocks, and hold them for a long time period, without touching the investment regardless of what happens in the market. 
  • Dollar-cost averaging- DCA is a strategy where you invest the same amount of money over time systematically- monthly, quarterly or maybe annually. This purpose of this is to reduce the risk or trying to time the market. It makes investing a bit more manageable and less scary. 
  • Lump-sum investing- Taking a sum of money and investing it all at once.



One of the first things I walk through with clients is their Risk Tolerance, as well as understanding the purpose, timeline, and tax implication on the investment we are setting up. According to an article by S&P Global, “Women invest less and start investing later in life compared to men… 26% of women are investing in financial markets, even though more than 40% say it’s a good time to invest” (

But, there is no better time to start than now. First, do some homework around which institutions require minimum deposits and which do not, then compare the fees with different brokers. Overall, the most important thing is to stay invested and ride out the market’s ups and downs, and keep your cool, then, you will be best set up for success!  

Erin Hoffman is a Registered Representative of Park Avenue Securities LLC (PAS). Securities products offered though PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly-owned subsidiary of Guardian. Certified Financial Services, LLC is not an affiliate or subsidiary of PAS or Guardian. The Living Balance Sheet® (LBS) and the LBS logo are service marks of The Guardian Life Insurance Company of America (Guardian), New York, NY. © Copyright 2005-2021 Guardian. CA Insurance License #4029326. 2021-123141 Exp. 6/23.

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