Online investing and women

Playing the stock market has always been a very male thing. Now a new wave of women working from home is changing all that. Madeline Thomas reports

Samina Ayub and her three children, from left, Daanish, Amber and Urooj. Photograph: David Sillitoe for the Guardian

Private investing, day-trading and playing the stock market has always been a very male affair. Yet, over the past decade more and more women have joined in. Ten years ago, just 17% of the investors who used the online broker Selftrade were women. This year, it is 34%.

This trend is not restricted to the one website. Stockopedia, a site specialising in broker research and stock market analysis, says between 30% and 40% of its user base is female.

"Gone are the days when online investing was completely dominated by men," says Edward Croft, chief executive of Stockopedia. "There are increasing numbers of smart, savvy women out there who are taking up the challenge of making their own investment decisions.

"They are showing that the traditional route of giving full control of your portfolio to an arms-length investment adviser is not the only choice." Many of the women who have turned to share trading have done so very recently. Selftrade's figures show that the proportion of investors using its site that are women jumped from 24% to 34% in just two years.

The increasing availability of information and share services online has helped fuel this trend. It has also shifted the emphasis away from affluent individuals and City workers.

Reading the blogs and message boards of sites ranging from the Motley Fool and Selftrade, to Interactive Investor and Stockopedia, it becomes very clear, very quickly, that investors are as diverse as the shares in which they trade. "The internet has made investing far more accessible and, as a result, we find that our users come from all walks of life and from all over the UK," Croft says.

However, as diverse as the investing community may be, many recent investors have taken the plunge because they have been dissatisfied by the performance of their more traditional investments. So, who are the new female investors?

Samina Ayub Debt recovery officer

Samina is a typical mum of three kids, aged eight, four and two. She is run off her feet and juggles the school run, nursery and childcare, and working four days a week as a debt recovery officer.

Samina has always saved. She was prompted to take the plunge into buying and selling shares after her two endowment policies – with Legal & General and Friends Provident – performed so badly. "I just didn't make anything on them. There was no point in doing them. I'm better off self-investing," she says.

Her disappointment in the performance of her investments came at the same time as she faced problems in her marriage, exacerbating the need for her to exert greater financial control.

"There was a time when I didn't mind someone else investing my money on my behalf, but I've had some issues – marital problems etc – so, financially, I need to be secure now. I'm much more conscious of the need to plan ahead and I've realised I need more control over what I'm doing."

Samina has been encouraged by her stepfather, Zahid, who has bought and sold shares for as long as she can remember, and has provided her with much appreciated guidance.

In the past year, Samina's confidence in her own investing ability has grown. Now, instead of just buying and holding shares, she has taken the plunge and sold shares and changed the weighting of her portfolio as the markets have changed.

"At the moment, I'm just invested in UK shares, mainly in power companies and energy providers, but I'm also looking to invest in US markets.

"I could trade a lot more than I do, but if I traded more I'd need to do more research, and I don't have the time for that. I'm doing this to plan for my future, as well, not just for the kids."

Samina's confidence has grown so much, thanks to the encouragement of Zahid, that she has now become an advocate of investing and has persuaded one of her friends to take up her hobby. "My friend is the same age – she's 41 – with kids the same age. She's a training manager with the civil service, but I've persuaded her, and she now buys shares. The risks are high but it's the best way to make some money grow if you've got the balls for it."

Kate Charity worker

Kate (not her real name) began investing in shares after her husband died. "My husband always managed the money. When he died there were all these decisions that I'd never taken that needed sorting. I carried on working and raising the children, and didn't really think about any investments other than to use the Isa allowance as it came up each year."

The turning point for Kate was when she stopped work seven years ago. "I just couldn't do the job and raise the kids on my own."

Suddenly she had more time on her hands and could do the research required to make sensible investment decisions. "I started off really small. Before, it was someone else always doing that investing and shouldering the risk, either in funds or in Isas, so when I started it suddenly seemed really risky to actually hit that 'buy' button. But I went in gently and read everything I could."

Kate has researched her investments thoroughly. She began by reading around her subjects. That gave her the material she needed to home in on her specialism – oil. Kate was looking to invest in something she could hedge against and, for her, that was commodity shortages. Many oil companies may list on the London Stock Exchange and be bought in sterling by UK investors, but they are essentially a dollar-denominated asset, which can remove the sterling risk.

"Once I found my forte, 90% of my active investing has been in oil shares. I'm not talking giants like BP, but small- and medium-sized companies. Their business is simpler to understand than, say, a bank or a pharmaceutical company, because they only have one product, so, as an investor, you're looking to find which company has an edge due to diligence."

Kate has now returned to work – for one of Britain's leading charities – and says her investing takes as much time as she wants it to take. "I don't run shorts, derivatives or warrants and I don't do spread betting. I just run straight equity positions so I can switch off if I'm on a fortnight's holiday, for example.

"I'm not glued to my PC, but I can do as much, or as little, as I choose."

Cynthia Former civil servant, now a housewife

Cynthia, who does not want to give her full name, feels she has to do her own investing in order to get any returns, having seen her hard-earned investments reduce in value under the guidance of a broker.

Having worked at the United Nationals Industrial Development Organisation (UNIDO) for 12 years, Cynthia took its "golden handshake" payment, worth around €50,000 (£41,500), and moved to the International Atomic Agency. She left the UN altogether in 2003 and moved to Britain with her husband. As UNIDO was based in Vienna, Cynthia entrusted her €50,000 to an Austrian broker. Seven years later, her investment is now worth just €40,000 (£33,200).

"It's really hard to see my money lose so much value, but I feel stuck with it now. If I take that money out, then I've made the loss real. I'd rather keep the €40,000 where it is in Austria and hope it can make up its shortfall. I feel like I really have no control over that money.

"When I came to the UK I'd left my job so I decided to study for a degree in psychotherapy. That's finished now, and I'm a housewife, for the moment, so I have the time to take control of my circumstances again. I've always worked, and I'm used to working, so I can't just sit and do nothing. Investing gives me the chance to do my own research, and it's not that hard if you are thorough."

Having spent most of her working life outside the UK, Cynthia's investing strategy is strictly global. Her focus is on Brazil, China and emerging markets.

"When I was with UNIDO I travelled a lot through Asia and Brazil, so I know where the opportunities are. For example, Brazil will be hosting the Olympics in 2016, so I'm looking at small- and medium-sized construction companies that I know will benefit from that work.

"I'm also looking in Asia. I'm looking long term at construction, engineering and technology. My mum is from the Philippines, and I've travelled a lot to Asia for work, and this is an area I feel I know. I'm comfortable researching the data and the companies here, and I will have so much more control over my investment choices by buying and selling my own shares than I would if I chose another broker."

However, Cynthia (above) is not ready to sever all advice ties. She has opted for an advisory online service rather than an "execution-only" one because she feels reassured that she can talk through her decisions.

"I can do all my own research and come up with my choices, but then I can double-check, as well, before taking the plunge," she says.

It won't all be high-risk, small-cap, emerging market companies. Cynthia has also homed in on a couple of blue chip favourites, "to get a bit more security, for the dividends, and to balance the portfolio".