This video is a call to action for women to take ownership of their financial power and future. My detailed Ellevest women investing platform review video will be part of a recurring series I’ll call “Mind the Investing & Wage Gap” and “The Rise of Women Investors.” Women have made great investment and income earning strides in the ongoing endeavor to achieve financial equity and wage parity. I say, get in the game and make your money work for you starting now.
Sallie Krawcheck, the founder and CEO of Ellevest, has declared that the Retirement Savings Crisis is a women’s issue. Women tend to retire with a fraction of what men have saved up for retirement and live several years longer. However, women have more financial power than some realize, in that women directly control at least $5 trillion of investable US assets. She explains how women can own their financial destinies in her “Own It” book that came out in 2017, coinciding with a big release of the Ellevest platform.
The team at Ellevest conducted comprehensive research about how women want to approach investing, and this is represented in many of their white papers and publications. This investing platform promotes diversified asset allocation portfolios made up of low cost ETFs, primarily from Vanguard. Their 2020 white paper describes how they founded Ellevest “to provide an engaging investing experience to help women meet their financial goals in life.” I am grateful that the Ellevest platform exists with women’s needs and goals in mind and I applaud their mission.
I describe my own experiences in investing in this platform for little over a year, and while this is not a long time in which I was invested in Ellevest, I came to some significant conclusions that have informed my investing choices. Based on several factors that I considered, especially their Monte Carlo simulations, I ultimately decided that this platform’s investing style was not aligned with how I prefer to invest. Ellevest’s investment philosophy is based on Efficient Market Hypothesis, which is an academic theory that states that stock share prices reflect all available information. However, this is not how Warren Buffett invests because he believes in determining one’s own valuations of stocks and the appropriate (Margin of Safety) price at which to buy. I am also scared of being invested in ETF funds with various companies (too diversified) that I have no idea if I really understand them or if I agree with the direction those companies are going in.
The irony is that diversity is a beautiful thing when it comes to having more women directors in a company’s board of directors, or more women CEOs, and more women middle management (because it is desperately needed). We also need more diversity of all kinds of people in all of these positions too. However, when it comes to investing, you want to be extremely selective and only invest in companies that are within your circle of competence and that you believe will grow into the future and provide respectable returns on your investment. I do not like excessively diversified investment portfolios because it’s a recipe for losing our money when the tide goes out. I’d prefer to try to achieve beyond what the market typically returns (by not losing money), and not get swept away by the mediocrity of ETF and index funds. I’d rather take my chances on myself and invest according to Warren Buffett’s and Charlie Munger’s teachings.
Ellevest’s robo-advisor platform does a pretty good job of focusing on what is important to women’s financial planning and considerations for the future. It complements women’s risk awareness and goal-setting orientation by illustrating how women can map out their financial futures. It is more than good enough for most people who don’t want to put in too much work in deciding which stocks or funds to invest in. The fees that Ellevest charges are competitive and can be less than some of what its competitors offer. I am glad they are here to promote women to invest and reduce the wage and investing gaps by educating all of us. I am grateful that they were still a part of my investing journey once upon a time. I will be rooting for them to keep helping many others out there achieve their financial goals too!
The journey towards FIRE (Financial Independence, Retire Early) is one filled with much gratitude, and I look forward to making more investor friends. Let’s follow each other on my Instagram @ https://www.instagram.com/michellemarki!