StreetWise: Women need portfolio skills

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Traditionally, investing has been a male-dominated activity. However, the rise in the divorce rate, the increase in expected female longevity, and the increasing number of women who choose to remain single means that an ability to manage investments is more important for women today than ever.

Every woman needs her own account with a deep discount brokerage firm. A deep discount firm is not just a monetary issue but a barrier against relying on the so-called "advice" of stock brokers. Deep discount firms do not give advice.

Experience says that I can once again expect a tirade of angry comments challenging the need for a married woman to have and manage her own portfolio. Unfortunately, a number of gruesome statistics embrace the assertion that she should. For example, women reaching the age of 65 can expect to live for an additional 25 years. That means they have a better chance of outliving their financial resources than their male counterparts.

Twenty percent of the female population will never marry. For those who do marry, half will divorce. Within the first year after a divorce, a woman's income could decline by an average of 30 percent. Failing divorce, 75 percent of all married women are eventually widowed. Among those widows, many will find they are at a reduced standard of living despite the fact about 80 percent were doing fine before their husbands died.

The good news is that a woman can take control of her financial destiny at any time. Over the years, I have seen numerous examples of women who have established their own portfolios, added to those portfolios regularly and as a result will be able to live out their lives relatively free of financial worry. However, in doing so they often had to resist the entreaties of others to change their courses of action.

Unfortunately, many women like to invest in low yielding bond funds with risk being considered an anathema to their well-being. I can sympathize regarding risk. Nonetheless, every woman should have a portfolio of individual equities that she oversees. Moreover, in today's investment climate, bonds are not where you want to be.

Out of the more than 10,000 public companies, you should consider investing in 15 to 20 blue chip dividend-paying industry leaders with a 10-year history of rising earnings and dividends. Above all, only consider companies whose products you understand.

For ideas, look to the Dividend Achievers Handbook published by Mergent (1-800-342-5647).

Lauren Rudd is a financial writer and columnist; LVERudd@aol.com


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