Women investors: how should your investment portfolio adapt to life’s milestones and goals?

This new edition of our LO Women Invest publication is devoted to two main topics : first, life-cycle investing and asset allocation, and second, 2025 risk and return expectation across liquid, sustainable and private assets, in light of the political changes in the US and elsewhere. You can download the full edition below.

Life-cycle investing

Life-cycle investing divides the investment journey into different life stages, each characterised by specific financial needs. Women often navigate more distinct life stages and income patterns than men, as a result of career breaks or part-time work, for example. Given their longer average life expectancy, careful financial planning for retirement and potential inheritances is essential.

Adapting asset allocations to each stage of life

Focus on growth in the 20-30s

Young women starting their careers may be able to contribute to tax-efficient retirement plans. This may often be their first investment step, when their savings rates are still low and investment horizons long. Such retirement-oriented programmes usually focus on investment funds with varying proportions of equity holdings corresponding to individual risk tolerances. This life stage is characterised by a long investment horizon and relatively high risk tolerance. The goal is to grow capital, so a multi-asset strategy tilted towards equities, like a Growth investment plan, is often suitable.

With longer life expectancies and perhaps an early retirement, women need their savings to support them, potentially for decades

Balanced payout during periods of reduced income

Women planning to start a family or facing life events like divorce or the death of a partner, may need regular income from their investments to offset reduced or interrupted income flows.

In such cases, balanced payout strategies may be appropriate, focussing on investments that provide predictable income streams, while maintaining an exposure to equities. Capital used to generate income is generally allocated to bonds, but low interest rates (in Switzerland for example) will often require the inclusion of high-yielding bonds, real estate, dividend-paying stocks, and sometimes, for eligible investors, income-earning structured products in their portfolios.

Read also: The growing force of women in wealth management

Moderate or Conservative strategies when preparing for retirement

With longer life expectancies and perhaps an early retirement, women need their savings to support them, potentially for decades. Their investment portfolio must therefore maintain their lifestyle while building a legacy for the next generation.

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At this stage of life, risk tolerance may decrease as investors rely more on predictable cash streams and capital withdrawals to fund activities and living costs. Portfolios should hold more fixed income or other income-generating investments that offer reliable annual cash streams and low volatility. Moderate or Conservative investment plans may be suitable at this stage.

‘Time in the market’ is consistently more powerful in the long run than trying to ‘time the market’

Since circumstances vary, these life stages serve as illustrations. For example, women living and working abroad may need to add new dimensions to their investment strategy to manage elements such as multiple currency exposures. For entrepreneurs, who may need to set personal assets against business loans, liability management becomes essential.

One key to successful investments is regular deployment of capital which lets a portfolio seize investment opportunities as they arise. ‘Time in the market’ is consistently more powerful in the long run than trying to ‘time the market.’