Compared to men, women are not as confident and knowledgeable about financial and investment matters. As a result, women often do not conduct investment planning until it is too late, and they are confronted with a financial crisis or a life predicament such as a divorce or death. In addition, limited scientific research exists on the investment planning practices of women in South Africa. This study contributes to the body of knowledge on investment planning by better understanding the unique financial needs and challenges of women. Recommendations made by this study will assist women and financial planners to make more informed investment decisions as they progress through life.
Therefore, the primary objective of this research was to investigate the factors that influence women’s
As this study focussed on the perceptions of women concerning the factors that influence successful investment planning, the target population was all women in the Nelson Mandela Bay area older than 20 years with some investment experience.
A quantitative research methodology was followed, and data were collected from 207 women using a structured self-administered questionnaire.
The results of the multiple regression analysis revealed that only one independent variable emerged as having a significant influence on
Based on the empirical results of this study, several recommendations have been made in an attempt to assist women to make more informed investment decisions and manage their investment planning more effectively as they progress through life.
It is important for individuals to engage in financial planning and set financial goals because this will assist them to persevere in difficult financial times and flourish in good times (Gitman, Joehnk & Billingsley
Despite the importance of undertaking financial planning in general and investment planning in particular, Mhlanga (
In addition, a study conducted by Goldsmith and Goldsmith (
Furthermore, Eikmeier (
Even though Falahati and Paim (
This study will contribute to the body of knowledge on investment planning by better understanding the unique financial needs and challenges of women. Recommendations made by this study will assist women and financial planners to make more informed investment decisions as they progress through life.
Based on the existing literature on financial and investment planning, several factors influencing women’s
Hypothesised model of factors influencing women’s
As illustrated in
According to Hockenbury and Hockenbury (
Kreie and Cronan (
According to Chaiklin (
According to Maio and Haddock (
Over the past few decades, however, more women have entered the workforce and helped to support their families financially together with their husbands (Campey
The survey result of Visa (SA women keep secret savings – survey
Time horizons are simply the length of time for which investors place funds in different investments in order to obtain their investment goals (e.g. capital growth or regular income from withdrawals of investments, or both) (Droms & Strauss
Women can maximise their financial security in the short-term and the long-term without any conflict between the two if they correctly identify the time horizons of each investment goal (Young
At the same time, a longer time horizon may be more in line with the investor’s goal of creating a solid financial base for the retirement years. In this scenario, the investor will probably move towards investments that show a consistent growth pattern over the years, with little to no downturns anticipated. The time horizon for this approach may span 30 years or more (Zugang & Jia
It appears that people’s financial priorities change as they move through the different phases of their personal life cycle (Overton
According to Cooper and Worsham (
Caldwell (
According to Droms and Strauss (
Lee (
A number of studies focussing on risk-taking in investments point out that there are differences between men’s and women’s risk tolerance levels. Charness and Gneezy (
For the purpose of this study,
According to Miller (
It is important for women to familiarise themselves with the different types of investment vehicles available to them, the risks and returns, as well as the fees related to each investment vehicle. Fees can include brokerage commissions and advisory fees, and every effort should be made to avoid unnecessary costs that can limit the gains on their investments (Bellingsley, Gitman & Joehnk 2016:249; Carney
Women should also understand and make use of diversification when engaging in investment planning. Hira and Loibl (
For the purpose of this study,
As this study focussed on the perceptions of women concerning the factors that influence successful investment planning, the target population was all women in the Nelson Mandela Bay area older than 20 years with some investment experience. Owing to the unavailability of a database containing the details of women investing in the Eastern Cape, non-probability convenience and snowball sampling techniques were adopted to draw the sample for this study. Client databases of female investors are confidential, and therefore access to these databases was not possible with investment firms and financial institutions. Sekaran and Bougie (
Financial and investment institutions in the area, such as First National Bank, Standard Bank, Old Mutual, Sanlam, Consolidated Financial Planning, Spectrum Group and South City, agreed to assist the researcher in approaching possible respondents. Research contacts, family members and friends in the area were also requested to identify any suitable respondents who could participate in this study. The size of the sample was further increased by referrals made by the participating respondents through follow-up communications via email. Potential respondents were provided an electronic link to complete and return the questionnaire. In total, 965 respondents were identified to participate, and 225 completed questionnaires were returned by the respondents, but only 207 were usable for further statistical analysis, indicating a response rate of 23.31% for the study.
The measuring instrument employed consisted of a cover letter and a questionnaire, comprising four sections. A detailed description of the purpose of the study and type of information requested was provided in the cover letter. The cover letter also addressed the issues of the respondents’ confidentiality, anonymity and opt-out options and emphasised that the completion of the questionnaire was voluntary. The required ethical clearance to conduct the research was also carried out.
Section 1 of the self-administered questionnaire consisted of 49 statements (items) that were adapted from previously used scales designed to measure the factors influencing respondents’ perceptions of successful investment planning. The items and the scales used are listed in
Section 2 of the questionnaire requested demographic information of the respondents, namely, their age, ethnic background, marital status, highest education level, occupation, investment experience, involvement in investment planning and type of investment instruments owned. Section 3 requested information relating to the respondents’ actual engagement with investment planning. Both sections 2 and 3 used nominal scales. Section 4 provided an open-ended question to gather respondents’ suggestions and comments relating to investment planning. Results from sections 3 and 4 were used to support and possibly justify the empirical results of section 1.
As far as possible, valid and reliable items were sourced from previous studies, but were rephrased to fit the context of the present study. Each variable was operationalised in terms of the scale, and are summarised in
Operationalisation and sources of variables.
Variable | Sources | Number of items |
---|---|---|
Benefits of financial planning 2012:10; Budgar |
8 | |
Bobowik et al. |
7 | |
Confidential questionnaire |
8 | |
Jaeger et al. |
7 | |
Caldwell |
6 | |
Confidential questionnaire |
6 | |
- | 7 |
Note: Please see the full reference list of the article, Venter, E. & Janine Kruger, J., 2017, ‘Exploring women’s perceptions regarding successful investment planning practices’,
The collected data were analysed by using Microsoft Excel and Statistica Version 12. According to Quinlan (
Ethics clearance was obtained from the Nelson Mandela University, with ethical clearance number: H13-BES-BMA-029.
The majority of the respondents were between the ages of 40 and 49 (32%), followed by those between the ages of 30 and 39 (23%) and between the ages of 50 and 59 (22%). Only a few respondents were between the ages of 20 and 29 (14%) or older than 60 years (9%). With regard to ethnic background, most of the respondents were white (71%), whereas a small group was Asian (3%) or Indian (3%). The remaining ethnic groups, namely, black (11%) and mixed race (11%) participated equally. Three respondents (1%) were not willing to indicate their ethnic affiliation.
Most of the respondents were married (64%). A few respondents indicated that they were single (18%), divorced (10%), in partnerships (5%) or widowed (3%). Regarding the respondents’ highest qualifications, most indicated that they held a post-graduate degree (45%), followed by respondents who had a diploma (24%). Some of the respondents had a bachelor degree (15%), grade 12 certificate (14%) or a grade 10 and tertiary certificate (2%). The great majority of respondents were employed full-time (84%), whereas a small group were employed on a part-time basis (8%). The remaining respondents indicated that they were retired (3%), homemakers (1%), students (1%), employed on contract or self-employed (3%). Nearly half of the respondents had investment experience in excess of 10 years (45%), between 1 and 5 years (31%) and between 6 and 10 years (17%). Only 7% of the respondents indicated having investment experience of less than 1 year.
After face and content validity were assured, an EFA was undertaken to assess the construct validity of the measuring instrument. Items with loadings greater than 0.5 that loaded onto one factor only were considered significant in this study (Hair et al.
Factor structure of the variables.
Items | IK | PLC | VAL | SIP | TH | R&R | ATT |
---|---|---|---|---|---|---|---|
ATT1 | 0.822 |
−0.066 | 0.005 | 0.229 | 0.034 | −0.053 | 0.042 |
ATT2 | 0.809 |
−0.003 | 0.046 | 0.233 | −0.051 | −0.118 | −0.035 |
IK1 | 0.779 |
0.083 | 0.069 | 0.142 | −0.041 | −0.085 | 0.092 |
IK3 | 0.774 |
−0.002 | 0.081 | 0.255 | 0.000 | −0.002 | −0.090 |
IK2 | 0.752 |
0.202 | 0.087 | 0.050 | −0.142 | 0.060 | −0.006 |
IK6 | 0.750 |
−0.036 | 0.113 | 0.019 | 0.096 | 0.162 | 0.004 |
RR1 | 0.744 |
0.097 | 0.077 | 0.119 | 0.024 | 0.095 | −0.157 |
TH7 | 0.686 |
0.152 | 0.106 | 0.046 | 0.093 | 0.162 | 0.203 |
RR3 | 0.640 |
0.178 | 0.023 | 0.219 | 0.080 | 0.199 | 0.161 |
RR5 | 0.633 |
0.159 | 0.116 | −0.055 | 0.010 | 0.378 | 0.086 |
TH5 | 0.603 |
0.121 | −0.001 | 0.064 | −0.008 | 0.373 | 0.175 |
IK5 | 0.578 |
0.146 | 0.059 | 0.004 | −0.049 | −0.041 | 0.162 |
ATT4 | 0.558 |
−0.082 | −0.072 | 0.360 | 0.028 | −0.173 | 0.072 |
PLC1 | 0.045 | 0.839 |
−0.003 | 0.089 | 0.008 | 0.018 | −0.009 |
PLC2 | 0.078 | 0.798 |
0.059 | 0.137 | 0.009 | 0.037 | 0.001 |
PLC3 | 0.211 | 0.790 |
0.016 | −0.085 | −0.077 | 0.043 | 0.068 |
PLC6 | 0.083 | 0.780 |
−0.010 | 0.122 | −0.009 | 0.095 | 0.112 |
PLC4 | −0.032 | 0.669 |
0.111 | −0.024 | 0.042 | −0.042 | 0.074 |
VAL4 | 0.053 | 0.026 | 0.742 |
0.012 | 0.032 | 0.112 | −0.097 |
VAL5 | −0.070 | −0.136 | 0.709 |
−0.031 | −0.002 | −0.204 | 0.201 |
VAL1 | 0.240 | 0.207 | 0.709 |
0.108 | 0.065 | 0.075 | −0.146 |
VAL6 | 0.225 | 0.084 | 0.700 |
0.026 | 0.133 | 0.122 | −0.111 |
VAL3 | 0.005 | −0.079 | 0.688 |
−0.023 | 0.063 | −0.056 | 0.150 |
VAL2 | 0.076 | 0.165 | 0.584 |
−0.107 | −0.050 | 0.090 | 0.134 |
SIP2 | 0.295 | 0.029 | −0.006 | 0.728 |
−0.093 | 0.006 | 0.137 |
SIP5 | 0.094 | 0.046 | 0.058 | 0.716 |
−0.001 | 0.004 | 0.001 |
SIP1 | 0.424 | 0.107 | −0.012 | 0.697 |
−0.035 | 0.104 | 0.048 |
SIP3 | 0.365 | 0.096 | −0.110 | 0.522 |
−0.035 | 0.225 | −0.062 |
SIP8 | 0.225 | 0.102 | 0.051 | 0.504 |
0.126 | 0.054 | 0.400 |
TH1 | −0.019 | −0.042 | 0.119 | 0.054 | 0.828 |
−0.012 | −0.058 |
TH2 | 0.088 | −0.036 | 0.146 | 0.042 | 0.815 |
0.085 | −0.083 |
RR4 | −0.034 | −0.027 | 0.041 | 0.088 | −0.045 | 0.699 |
0.056 |
RR2 | 0.099 | 0.176 | 0.045 | 0.102 | −0.104 | 0.608 |
0.209 |
ATT8 | −0.071 | 0.025 | 0.004 | 0.119 | −0.108 | 0.160 | 0.664 |
VAL7 | −0.051 | 0.165 | 0.025 | 0.134 | −0.099 | 0.255 | 0.641 |
ATT5 | 0.395 | 0.112 | −0.071 | 0.015 | −0.078 | −0.079 | 0.572 |
SIP4 | 0.335 | 0.126 | 0.013 | 0.465 | 0.076 | 0.055 | 0.363 |
SIP6 | 0.356 | 0.105 | −0.017 | 0.232 | −0.082 | −0.233 | 0.361 |
PLC5 | −0.072 | 0.469 | 0.012 | 0.000 | 0.035 | 0.214 | 0.332 |
TH4 | 0.419 | 0.168 | 0.018 | 0.033 | 0.075 | 0.444 | 0.327 |
SIP7 | 0.355 | 0.125 | 0.028 | 0.387 | −0.178 | −0.029 | 0.277 |
IK7 | 0.159 | 0.147 | 0.193 | 0.309 | 0.064 | 0.054 | 0.237 |
RR6 | 0.356 | 0.167 | 0.124 | 0.098 | 0.193 | 0.400 | 0.150 |
TH6 | 0.275 | 0.195 | 0.172 | 0.016 | 0.131 | −0.182 | 0.141 |
IK4 | 0.390 | 0.104 | 0.028 | 0.236 | 0.107 | −0.015 | 0.129 |
TH3 | 0.100 | −0.065 | 0.125 | 0.201 | −0.753 |
0.137 | −0.040 |
ATT3 | 0.271 | 0.219 | 0.012 | 0.461 | 0.076 | 0.409 | −0.065 |
ATT6 | 0.281 | −0.185 | 0.040 | 0.278 | −0.092 | 0.129 | −0.085 |
ATT7 | 0.138 | −0.051 | 0.404 | 0.021 | 0.224 | 0.027 | −0.131 |
Expl.Var | 8.440 | 3.896 | 3.279 | 3.493 | 2.260 | 2.272 | 2.450 |
Prp.Totl | 17.224% | 7.951% | 6.692% | 7.130% | 4.613% | 4.637% | 5.000% |
CA | 0.924 | 0.839 | 0.793 | 0.793 | 0.761 | 0.597 | 0.480 |
IK, investment knowledge; PLC, personal life cycle; VAL, values; SIP, perceived successful investment planning; TH, time horizon; R&R = risks and returns; ATT, attitudes; CA, Cronbach’s alpha coefficient.
AUTHOR TO PROVIDE MEANING
Despite only five of the seven items originally developed to measure
As five of the six items originally used to measure
Six of the seven items originally developed to measure
Despite only five of eight items originally expected to measure
According to Suhr (
Based on the EFA, the operationalisations of the various constructs were reformulated, and the original hypothesised model (see
Summary of revised hypotheses.
Factors | Hypotheses |
---|---|
Investment knowledge | H01: There is no relationship between |
HA1: There is a relationship between |
|
Personal life cycle | H02: There is no relationship between |
HA2: There is a relationship between |
|
Values | H03: There is no relationship between |
HA3: There is a relationship between |
In order to describe the sample data, descriptive statistics consisting of the mean, standard deviation and frequency distribution for the sample as a whole were calculated. The response options relating to the statements measuring all the independent variables and the dependent variable (
Descriptive statistics results.
Factors | Mean | Standard deviation | Disagree % | Neutral % | Agree % |
---|---|---|---|---|---|
Investment knowledge | 5.156 | 1.001 | 7.73 | 15.46 | 76.81 |
Personal life cycle | 6.064 | 0.650 | 0.48 | 1.93 | 97.59 |
Values | 4.463 | 1.209 | 20.29 | 22.71 | 57.01 |
Perceived successful investment planning | 5.112 | 1.027 | 6.28 | 19.81 | 73.91 |
From
The dependent variable
The Pearson product-moment correlation coefficients were calculated to measure the linear association between the dependent and independent variables. The Pearson product-moment correlation coefficient indicated positive significant correlations between most variables in the study. The strongest positive significant correlation was reported between
Multiple regression analysis was performed to determine the influence of the various independent variables (i.e.
Influence of the independent variables on perceived successful investment planning.
Independent variables | B | ||
---|---|---|---|
Intercept | 1.757 | 2.850 | 0.005 |
Investment knowledge | 0.550 |
8.831 |
0.000 |
Personal life cycle | 0.117 | 1.237 | 0.217 |
Values | −0.044 | −0.860 | 0.391 |
significant.
Note: Dependent variable is the perceived successful investment planning.
According to
Summary of acceptance of formulated hypotheses.
Hypotheses | Decision | Reason |
---|---|---|
H01: There is no relationship between |
Reject | |
HA1: There is a relationship between |
Accept | |
H02: There is no relationship between |
Accept | |
HA2: There is a relationship between |
Reject | |
H03: There is no relationship between |
Accept | |
HA3: There is a relationship between |
Reject |
Only the
The findings of the study revealed the existence of a significant positive relationship between
In order to obtain and develop knowledge about investments, women should consider becoming more knowledgeable about topics related to investments, and reduce their fear and their lack of confidence when making investment choices, as well as not feeling obliged to invest with a particular advisor or a particular investment vehicle. By obtaining more knowledge about investments, women can make better and more informed investment decisions without the influence of their emotions. In particular, they should equip themselves with knowledge about the different investment vehicles available to them, their growth rates and possible risks, and possible fees related to each investment vehicle, as well as investments that cater specifically for women. In addition, they should be aware of the tax implications of investment vehicles to minimise unnecessary costs.
Women should consult with financial and investment advisors in order to get assistance and guidance on how to make correct investment decisions and monitor their investment more effectively. This applies especially to women who are not confident themselves about making investments or have limited time to take care of their investment planning. However, they should still be aware of the performance and management of their investments by requesting regular up-to-date reports on the performance of each investment.
If women want to manage their investments themselves, it is advisable that they attend investment workshops, short courses, seminars or conferences presented by investment experts in order to gain practical investment knowledge, and tips and strategies on how to make good investment decisions. Reading investment books and magazines which provide useful information about investments could assist women to get started in investment planning, and to increase their confidence in making investment decisions.
Based on an analysis of the open questions in the questionnaire, the majority of the respondents agreed that it is important to start investing from an early age. One respondent stated that to start investing early before marriage helps women learn how to become financially independent of their spouses. In addition, the earlier women start investing and take out life insurance, disability and dread-disease cover, the cheaper the cost of these investment vehicles will be. Furthermore, it is important for women to educate their children about the benefits of saving and investing from a young age. The respondents in this study stressed that access to reliable investment options that suit individual needs should be more easily available to women. One respondent suggested that investment options should be made to be more easily withdrawn, with fewer penalties imposed, while other respondents recommended that investors should not be given a choice to terminate their investment plans.
The results of the multiple regression analysis did not show a significant relationship between
In this study, no significant relationship was found between
Although the present study has attempted to make a significant contribution to financial and investment planning literature, some limitations were encountered. Firstly, because non-probability convenience sampling was used, the results of the study cannot be generalised with absolute confidence to all women in South Africa. In order to make the research more valuable, future research concerning women’s perceptions on investments should extend to other areas of the Eastern Cape or to the other regions of South Africa.
Secondly, several of the factors identified as influencing
Thirdly, this study focusses only on six variables that influence women’s
The majority of respondents that participated in this study were white (71%) and married (64%) with previous investment experience. These results showed that the demographic characteristics of the respondents in this study were homogeneous. Future studies should make use of a stratified or a quota sampling method in order to avoid the problem of over-representation of one particular ethnic group, for example. Future research could also be conducted amongst women with and without investment experience.
Despite the limitations mentioned, the research still provides a significant contribution to the existing literature of research on financial and investment planning. Most previous research focussed on different components of financial planning such as retirement planning or risk management other than investment planning. Only limited research has addressed women’s perceptions of investment planning. In addition, suggestions were made to assist women to make better investment decisions and manage their investment planning more effectively.
The authors would like to acknowledge the contributions of Ms. T.A.T. Dao in the completion of this article.
The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.
Both authors, E.V. and J.K., contributed equally in terms of the theory, empirical analysis, discussion and recommendations. E.V. initiated the article and was mainly responsible for corrections.
Scales measuring the dependent and independent variables.
Variables | Sources | Items |
---|---|---|
Perceived successful investment planning | Budgar |
I am satisfied with the growth of my investments. |
Budgar |
I am satisfied with the income I receive from my investments. | |
Budgar |
The growth of my investments exceeds inflation (the general increase in the price of the goods). | |
Budgar |
I have made more profits than losses since I started investing. | |
Financial Independence of Women |
The returns/income from my investments gives me financial independence. | |
Self-generated | I am in control of my financial matters because I am investing. | |
Self-generated | I am able to plan for my future financial needs through engaging in investment planning. | |
Williams |
I am able to achieve my financial goals by investing. | |
Values | Journey |
My personal values often guide me when investing. |
Bobowik et al. |
My family values often guide me when investing. | |
Bobowik et al. |
My religious values often guide me when investing. | |
Bobowik et al. |
My ethical values often guide me when investing. | |
Bobowik et al. |
My cultural values often guide me when investing. | |
Hockenbury & Hockenbury |
I only make investments that are aligned with my personal values. | |
Hockenbury & Hockenbury |
Making investments is important. | |
Attitudes | Confidential questionnaire |
I am comfortable making investment decisions. |
Confidential questionnaire |
I am confident making investment decisions. | |
Goldberg |
I can gain financial wealth through investing. | |
Hira & Loibl |
I find it easy to make investment decisions. | |
Jefremovas ( |
I like making investments. | |
Brenner |
Women make better investment decisions than men. | |
Confidential questionnaire |
I like to take risks when investing. | |
Cooper & Worsham |
It is necessary to start investing as early as possible. | |
Time horizon | Parker |
I prefer to make investments with the time horizon (length) of less than 5 years. |
Parker |
I prefer to make investments with the time horizon (length) of less than 10 years. | |
Parker |
I prefer to make investments with the time horizon (length) of more than 10 years. | |
Klos et al. |
I consider the time horizon (length) of investment vehicles when investing. | |
Klos et al. |
I consider my investment goals when choosing the time horizon (length) of my investments. | |
Investment Discovery Questionnaire |
I consider the ease with which I can convert my investments into cash when choosing the time horizon (length) of my investments. | |
Investment Discovery Questionnaire |
I know the time horizon (length) of each of my investments. | |
Personal life cycle | Cooper & Worsham |
I need to monitor and change my investment planning at different stages of my life (i.e. single, married or divorced). |
Overton |
My investments need change as I move through the different stages of my life. | |
Overton |
My investment priorities change as I move through the different stages of my life. | |
Caldwell |
Different age groups have different investment goals. | |
Caldwell |
Investment goals will change according to my life stages (i.e. single, married or divorced). | |
Cooper & Worsham |
Investment goals will change as a person grows older. | |
Risks and returns | Mayo |
I am aware of the different type of investment risks (i.e. market risk, business risk, interest rate risk, inflation risk and liquidity risk). |
Swart |
I am aware that risks and returns are positively correlated. In other words, the higher the risk, the higher the return. | |
Confidential questionnaire |
I am aware of my investment risks (risks related to each of my investment≈vehicles). | |
Investment Discovery Questionnaire |
I am aware that I need to take more investment risks if I want to get higher returns. | |
Swart |
I consider the investment risks when choosing the time horizon (length) of my investments. | |
Swart |
I consider the returns when choosing the time horizon (length) of my investments. | |
Investment knowledge | Investment personality Questionnaire |
I have knowledge about different investment opportunities. |
Investment Discovery Questionnaire |
I have knowledge about the time horizon (length) of different investment vehicles. | |
Andrew |
I know who will be able to assist me in making investment decisions. | |
Carney |
I know the cost implications (i.e. tax or fee payable) of different investment vehicles/opportunities. | |
Wanyana |
I gather information regarding investment vehicles/opportunities. | |
Wanyana |
My investment decisions are based on investment knowledge. | |
Wanyana |
My investment decisions are based on past investment experiences. |