What Should Women in Finance Invest In?
You’ve been looking for ways to create another stream of income, you’re wanting to build more wealth for yourself and your family—you’re trying to become more financially literate and serve as a model for your friends, family, and community.
Investing is one of those ways. But, according to Charlene Rhinehart, the key to success isn’t falling face-forward into stocks without a second thought—it’s to invest wisely.
Charlene is a CPA, bestselling author, and the Founder of Wealthy Women Daily. Over the summer, we had the opportunity to sit down and ask her one of the questions that women in accounting struggle with most when they want to become more financially literate with their investments:
How do you know what to invest in?
She covers this in her bestseller, Dividends Are a Queen’s Best Friend, in detail. And she shared some of her strategy here with us.
So, how do you cut your path through all of the options out there and find the stocks worth investing in for yourself—and for your account?
Start with what you know
Do your research
Pay attention!
Charlene talks about this as an exercise, which she explains further in her book. So grab your pen and journal, and get ready to do some homework.
Start with what you know
If you haven’t already grabbed your notebook, do it now! Charlene says that the first step for business professional women looking to start investing is to create a watchlist that answers the following questions:
What do you already know?
What are you interested in? What are you passionate about? What are the things you like?
You always want to start with what you know when it comes to investing, because you already understand how the product works.
Not only that, but you also have a sense of how popular the company is and what the general attitude is toward them.
Plus, you’ll also have an understanding of whether the company has an economic moat.
An economic moat is when it’s difficult for competitors to break into the space because a company has a big market share in that industry.
So, think about it: what products are you already buying?
Who are you following online?
What are your interests?
Do your research
Once you have narrowed down your search to a few companies, it’s time to do your due diligence.
Think about the company and what they prioritize—to their audience and behind-the-scenes.
What are they presenting to publicly, as their brand? Is it something like customer loyalty? Sustainability? Trustworthiness?
Then, look at their financial statements, look at how much debt they have, and their potential for growth.
Pay attention!
Now, even all the research on a company’s financial statements won’t be enough to justify investing in their stock. You also have to analyze the terrain around you.
What does this mean? Simple: just pay attention to what’s going on at any given time.
What’s going on politically in the country? Has the company had any public scandals?
Importantly, what you also want to pay attention to is whether there’s room for growth.
Take the pandemic, for example. Investing in medical stocks, like vaccine research, would be a prime example of paying attention to your terrain.
Conclusion
It’s not just important to know when to invest in a certain stock—it’s also essential to know when to let go.
If the stock isn’t paying off the way you want it to and the relationship is no longer working: it’s probably time to separate.
Charlene talks about strategies for knowing when’s the time to do this and exactly how to pull the plug in her book, Dividends Are a Queen's Best Friend; seriously, if you're interested in building a portfolio and adding investments as one of your streams of income, go get it!
Learning how to invest wisely is just one aspect of increasing our financial literacy as women in accounting—but it’s a big one!
Have you started your investing journey?
