The Hindu Business Line : Looking beyond deposits...

Liquidity is the key consideration that determines the mode of investment for single women — a reason why bank deposits are still the preferred investment option; but there are many who are not shy of entering the equity market or creating a mutual fund portfolio.

Radhika Gupta is one smart cookie. The 20-something B-School graduate, who works with a leading Mumbai-based brokerage house, is the epitome of the new-age Indian single women: She relishes her independence as much as she guards it fiercely, and she is completely hands-on when it comes to managing her investments. She's candid enough to admit that her educational background and her current job are two factors that enable her to get a bigger bang for her invested buck. Not surprisingly, her preferred investment vehicle is equities, in which she invests directly. "It's difficult to be in a job such as mine and still not be enamoured by equities," she says with a smile.

She believes that equities would offer the best returns over the long term and says that if we get to see a couple more bull markets as seen last year, she might just lay her hands on her dream home far quicker than anticipated! Try telling her about the risk of investing in stocks and she is quick to respond that more than the money, she has a strong heart that can soak up the losses than one needs to get accustomed to while playing the equity market game. Ask her about marriage and she comes up with the stock reply: "Not in the near term".

She adds that even after she's married, she would continue to actively pursue investing in stocks, though she might scale down the extent of her exposure to equity. While her understanding of the markets does confer upon Radhika the edge when it comes to investing in equities, others are not as confident as she is.

Smita Ganguly, who works for a Kolkata-based media publication, says that the sheer complexity of the equity market itself acts as a deterrent and she steers clear from dabbling in stocks. She says liquidity is the key consideration that determines her mode of investment; as a result, a bulk of her investments is held in the form of bank deposits. She states that though the returns from such instruments may not be as attractive as what one might get by investing in other asset classes such as stocks, she is better off because she does not have to bother about her invested capital taking a knock.

Of late, she has also started earmarking a portion of her surpluses for investment into gold, which she thinks is another stable avenue.

Toss the complexity argument of stock markets to Aparajita Ramani, a Mumbai-based freelancer who specialises in making corporate films, and her rather sharp reply is, "So what if I do not understand the intricacies of how the stock market functions; a mutual fund manager certainly does!" Therefore, her preferred mode of investments is through mutual funds. It's ideal for her because her hectic travelling schedule makes it nigh impossible for her to track her investments on a day-to-day basis.

"Outsourcing is in, so I thought I might as well get my investments done through a mutual fund," she says, her tongue firmly in place. She keeps herself updated by regularly scanning both business dailies and magazines to figure out which are some of the better performing mutual funds in the market. Her assessment over, she then speaks to a few acquaintances before zeroing in on her investment choice. Ask her how her investments have performed and she says, "Last year was exceptionally good; this year has been a bit of a downer. At least, I'm happy that my investments have earned me far more than what they would have had they been parked in a bank deposit."

With women increasingly pursuing their careers, the biggest difficulty they face when it comes to keeping a tab on their investments is paucity of time. While this could be the reason why most of their surpluses idle away in a savings account, others such as the Chennai-based Ranjitha Ramaswamy, a sales manager with a frontline consumer goods company, follow a different investment tack. Demands of work ensure that she is living out of her suitcase for the best part of the month; the rest of the time is spent working the local market. To get around the problem caused by paucity of time, Ranjitha has handed over her investment responsibilities to her father, who, in her opinion, is a conservative investor with a healthy distaste for investing directly in the equity market.

Her surpluses are predominantly invested in a basket of equity mutual funds and other fixed income instruments such as bonds. She ensures that an adequate amount is left in her savings account to meet her short-term liquidity needs; she adds that the amount in this account is an added source of comfort when she is travelling and needs to access cash in a jiffy.

Are investment patterns any different when we look at middle-aged single women? To a large extent, it is also driven by the circumstances that confront them.

In the case of Andal Rajagopal, a 50-year-old who works with a public sector enterprise, her investing paradigm took a knock after her husband expired a few years ago.

"Earlier, I invested part of my surpluses in gold; the rest found their way into sari stores. I could afford to do it then because my husband used to take care of investing for the future."

Now, with the domestic environment having changed, she attaches greater importance to investing in small savings financial instruments such as PPF and NSC. Returns from such schemes may not be as attractive as they were earlier thanks to declining interest rates, but Andal says she prefers them because they are easy to comprehend, risk-free and provide decent returns.

With her daughter already married and settled abroad, Andal says that her priority is stability in returns and the preservation of her capital. And just in case you are wondering whether she's kicked the habit of buying gold for good, she adds with a twinkle in her eye that the metal continues to hold out attraction for her and she still does buy it in an occasional moment of weakness!

(Names changed)

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