In the world of investing, women are breaking barriers. Among these trailblazers stands Lauren Simmons, the author of “Make Money Move” and the youngest full-time female equity trader on Wall Street. Having navigated the complex world of investing, she’s got plenty of gems to offer women looking to make their money work for them. Below she’s sharing her insights on the ways women can increase their financial knowledge, and become formidable investors.
Featured Expert: Lauren Simmons
Lauren Simmons - Author who was the youngest full-time trader in Wall Street history
How should I approach diversification?
We should not be putting all of our eggs in one basket — especially with the climate that we are in. The market is very volatile, and if I'm being honest, I think that we should be looking at other asset classes versus the traditional stock market. Think: Treasuries, CDs, and money market accounts. I would look at places where you're going to get those safer returns.
How can I mitigate risk when investing?
I always invest with money that I’m willing to lose. My advice is to follow the 50/30/20 rule: 50% of your money after taxes goes towards needs (think: bills and everyday household things) 30% is wants, like going to a movie or getting your hair done, and 20% goes to savings. When it comes to investing, that money is going to come from that 20% bucket. You also need to understand what kind of investor you are. Ask yourself if you’re a more conservative, mid-risk, or high-risk investor. With investing, you have to be willing to lose some of the money that you invest, so it should never come from that 50% “needs” or 30% “wants” portion of your budget.
Tips for beginners learning to invest?
This is a marathon, not a sprint — and not something that happens overnight. Different milestones are going to shape how you evolve as an investor. Being an investor in your early twenties is going to look a lot different from you as an investor when you’re older. Be open to continuing to learn as you reach different salaries within your career.
You already know how to invest. We already know how to choose products, check reviews, and figure out what we want to buy. It’s the same when buying stocks. Think of it like a grocery store: You already know how to research companies and lean into the ones you use in your everyday life. Don’t overthink it. Use your curiosity as the basis to invest in companies.
Finally, no one has all the answers. You’re going to find people who think they are experts in the space, but we should be gathering as much information from various sources when we’re making decisions. If you were sick, you wouldn’t look at one website to diagnose yourself. You’d want to get multiple opinions from doctors and experts — it’s the same with investing.
How can I which investments are worth it?
Anyone can make an argument on why something is a good investment. And it can be a good investment for them, but it may not be for you. When you’re making an investment decision, it should be personal, and a good investment for you is going to depend on many factors. Because of the environment that we’re in right now, investors should consider investments with safer returns, like treasuries. If you’re putting your money into the stock market, look for stocks in companies that make consumer staples and everyday household items. Companies that sell water, bleach, and napkins — these are things that people are always going to need. In the future, you can look at different ways to invest.
This interview has been edited and condensed for clarity.
Sign up for the Daily Skimm email newsletter. Delivered to your inbox every morning and prepares you for your day in minutes.