216 | Investing Strategies for Women with Hilary Hendershott

Investing Strategies


Welcome to episode 216 of Love, your Money! In this episode, I’m sharing strategies women can use to invest, make money, and love their financial journeys.


Although women have every right to build wealth through investing, progress is often hindered by both self-imposed and external limitations. But with the right strategies, you can clear those hurdles and experience financial empowerment.


Today, you’ll hear implementable advice for women who want to take the reins of their investing goals, including how to make smart stock market investments, ways to diversify your portfolio, and how to cut through the noise to find useful advice.

Here’s what you’ll find out in this week’s episode of Love, your Money:

  • The magic of compound interest
  • Should you invest in real estate? 
  • Evidence-based investing in the stock market
  • How to look at stock market volatility
  • How consistency creates wealth
  • Taking control vs. taking advice 
  • Diversifying your portfolio 
  • Ethical investing 
  • How to choose a financial advisor
  • Embracing financial empowerment

Inspiring Quotes

“Personal finance and the idea of building net worth seems to be, to me, the last frontier of feminism.”

“Over the long run, the stock market can produce for you some of the only truly passive income in the world.”

“Financial empowerment is about choice, choosing where to invest, whom to trust, and how to manage risk. It's about understanding that while markets fluctuate, your resolve to thrive can and should remain unwavering.”

“Your financial journey is a lot like life itself. It's really a blend of strategy, wisdom, adaptability, and heart.”

“It's possible to get to a point where you're earning more money in your investment portfolio in a given year than you earn in your job or pay yourself.”

“Evidence is not a neighbor who swears by his latest stock pick. And it's not flashy new segments with bold or scary predictions driven by the constant need to advertise. True evidence is grounded in historical data.”

“Taking the time to find the right financial partner in your life can be one of the best investments of your lifetime.”

Resources and Related Love, your Money Content​

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Hilary Hendershott: Welcome back to Love Your Money with me, Hilary Hendershott. Today, we’re diving deep into a topic that’s very close to my heart, empowering women to invest well and successfully. I want you to make a lot of money in the stock market. I want you to love your money, love your bank account balances, love your investments, all of it. I have said in the past, personal finance and the idea of building net worth seemed to be, to me, the last frontier of feminism. At this point, a woman can pretty much do or be anything she wants, but we still suffer self-imposed and sometimes externally imposed limitations to owning and building and controlling real wealth. Women, just like men, have every right and capability to excel in the world of investing. In fact, in order to enjoy true freedom and be self-determined, we have to control our own money because there are some problems only money can solve.


A colleague of mine got really excited about her personal finances and controlling spending and building net worth and all that makes possible. And I’m not taking all the credit here but her inspiration is at least in part due to a talk I gave for a group that she and I are a part of. She recently said to me, “Money won’t solve all my problems, Hilary, but it sure will solve all my money problems.” And I agree. It’s possible to get to a point where you’re earning more money in your investment portfolio in a given year than you earn in your job or pay yourself from the company you run. That’s a great place to get to. I have many clients for whom that’s true in positive stock market years. And that’s really the beauty of compound interest or compound returns. And I laugh because we learn so much B.S. math in high school. I mean, I remember the day they introduced the Z axis in what is that, trigonometry? And I’m going, “What? The Z axis? I don’t understand.”


But we still don’t have a class on how to not use credit cards or how to engage and leverage compound interest. I mean, of course, the gifted math students who make it to calculus learn compound interest as a sidebar, but they don’t teach it in terms of personal finance. So, here’s what you need to know about compound interest. It’s been called the Eighth Wonder of the World. Poor people pay it in the form of credit card interest fees. I did. I do not anymore. And rich people earn it in the form of long-term investments like the ones we’re going to talk about today. Compound interest is where your money earns money on an investment, and then instead of cashing it in or spending it, you let it ride. So, then you have money that you earned, didn’t cost you anything but time, letting the investment earn returns, and then that free money earns you more money. So, free money earns free money, and then that free money earns even more money.


This is why all the personal finance pundits are always telling people to start investing in their 20s, which almost no one does. I never say that on this show because I didn’t wake up about money until my early 30s so how am I going to tell you too? And most people who listen to this show are in their early 30s or later. So, why would I annoy you or make you feel bad about something you didn’t do in the past? Because you can’t change the past, right? I won’t do that. But you can get started today. And that’s what this episode of Love Your Money is all about. So, when it comes to talking about investments, I already know what some of you are thinking. “Hilary, I’m much more comfortable talking about real estate. I can buy a house. It’s mine. It’s real. I can touch it. The stock market seems risky, Hilary.” Well, I’ll tell you why real estate investing isn’t something I can or will cover on this show, nor do I recommend it.


Some people will get lucky and they make good real estate investments and others will have a financially devastating experience. But let’s just take the people who have a net positive financial experience owning a home. So, remember, any time you think about investing, you have to evaluate the alternative opportunities or what could have been the alternative experience. So, what could you have done with that money that you put into that rental? It’s almost always rental real estate that people do, right? You buy a house or a condo and you rent it out. What could you have done with that money if you hadn’t invested it in a piece of real estate? So, mathematically speaking, and financial advisors like me have run the numbers, I’ve run real numbers for my clients. Of course, I can’t run every scenario because there’s a hundred million houses or condos in the country that you could buy. So, I can’t possibly evaluate every scenario, but I’ve evaluated real scenarios and I do know the expected return on most real estate. And I don’t have any reason to believe that you wouldn’t have had a better experience with a diversified stock portfolio like the one we’re going to talk about today.


So, that’s what I work with. That’s what I recommend. That’s what we’re talking about today. And these lessons will absolutely serve you for the rest of your investing lifetime, which is, of course, the entire amount of time you are on the planet. So, there are basic fundamental characteristics of an investment portfolio that really can be relied on to earn you compound returns for the rest of your life. And probably the most important of those is diversification. We’re still talking about real estate. We’re going to talk about diversification again later. You really should have lots of different types of stuff in there. And when you buy one house or one condo, you have zero diversification. It’s just too many eggs in one basket and too much can go wrong.


And the income and return possibilities from that real estate purchase, in my experience, again, rarely exceed what’s possible from a stock market portfolio. Not only that, people complain about paying 1% to a financial advisor like myself, but in today’s world, if you put a 50% down payment on an investment property and most people don’t do 50%, you’re going to take an 8 or more percent mortgage for the rest. So, if you average that out, you’re paying a 4% carried cost. That’s again averaged for that investment and I never hear people complain about that. And even though you’re paying 4% on that piece of real estate, you still have to go it alone. You get zero consultative advice. Lots of things can go wrong when you own a physical home, including being sued by your tenants or having circumstances beyond your control leave you with uninteresting returns. It can be very punitive. So, again, that is why I talk about stock market investments and not real estate. It’s what I do. It’s what I recommend my clients do.


Over the long run, the stock market can produce for you some of the only truly passive income in the world. And even though you may not feel like you understand it today, you can understand it well enough and there are enough very smart people making this kind of investment available to you in an evidence-based, low-cost way that you can absolutely learn, what you need to learn to select a path forward that works for you. So, here we go with investment strategies for women. Now, remember, this is just a podcast episode. It’s not a college course, and it’s certainly not a master’s degree program. There’s no textbook that comes with it. Investing is very technical, so by its nature, it’s going to be a high-level overview. But today you will learn strategies that, if you adopt them, will serve you well over your investing lifetime. In fact, if you adopt these strategies and live by them when it comes to your investment accounts, you’ll probably be doing better in that regard than most of the people you know.


All right. Here we go. Let’s talk about the power of evidence-based investment methodologies. So, I am sure you’ve heard countless tales from your friends, family, or that chatty neighbor about the perfect stock tip or the next big thing in the market. Like, sometimes they’re predicting this industry is going to take off or at the beginning of 2023 this year, people were telling me right, left, and center that this year was going to look like 2008. We were going to have a 50% downturn. I’m going, “Okay. All right. I hear you.” It really is tempting to listen to these people but here’s the deal. Those stories, while they may be well-intentioned, are not evidence-based. Evidence isn’t about your neighbor who swears by his latest stock pick and it’s not flashy news segments with bold or scary predictions driven by the constant need to advertise. True evidence is grounded in historical data. It’s academic. It’s not sexy. It’s not very exciting. I mean, that story the numbers tell is exciting, in my opinion, but it’s not dramatic. It’s not fast.


The story that that data tells is really the incredible resilience of the stock market over decades. And the stock market is made up of real people. Like, those are real companies in there. It’s not just some amorphous thing on a ticker tape, right? Those are people running companies. So, the stock market includes ups and downs but the undeniable growth trend over time is evidenced. We know it. So, evidence is about recognizing the might and strength of the world’s most remarkable companies and the value that they create year after year because that’s what investing in the broad stock market really is. It’s investing in human intelligence and ambition and the spirit of competition and the drive to produce customer and shareholder value around the world. Owning shares in the great companies of the world isn’t a gamble. It’s not based on guessing. It’s an investment strategy anchored in reality.


So, when you rely on evidence-based methodologies, you’re trusting decades of data research and the cumulative wisdom of market trends like the cumulative wisdom of people. You’re sidestepping the noise and focusing on what truly matters. And in terms of sidestepping the noise, I hereby give you permission to like not read the financial news media. I mean, especially what I’m talking about specifically is the articles and pundits who are making predictions. What’s going to happen this year? What’s going to happen next week? Nobody knows the answers to those questions. So, I give you official permission to turn that stuff off. I don’t watch it. I beg my clients not to watch it. You certainly don’t need to. So, the first strategy circling, kind of capping up this section of investment strategies, the first strategy is to definitely select evidence-based investment portfolios. Don’t guess.


Okay. So, now that we’re clear that we’re going to get our advice or our investment strategies from the evidence, how do we apply it? What do we do once we have a portfolio? You got to navigate what can be sometimes very scary market volatility. You have to play a long-term game. Don’t lose faith. Let’s talk more about that. I know you’ve heard the adage, “Investing isn’t a sprint. It’s a marathon.” What does that really mean? I like to tell my clients that they’re lifelong investors. We’re lifelong investors because we’re building a plan to ensure your money outlives you. That’s the goal, right? But here’s where too many people stumble. They have a great plan. And when the road gets rocky, they deviate from it. They get scared, they lose faith, and they sell out. But stock market volatility and even very long periods of sideways returns are normal and expected. You don’t get to earn 7%, 8%, 9%, 10% per year for free. That’s why CD rates are almost always just below inflation rates.


I mean, if you want a free, consistent, no-drama rate of return, you’re going to pay a lot for that consistency in the form of much lower expected returns. And that’s why the true flex when it comes to being a savvy and sophisticated stock market investor is to set it and forget it. As long as you have an appropriate underlying portfolio, as long as you’re holding the right companies and in the right proportion, do your best not to suffer about short-term declines. Also, remember, short-term can be as long as five and even ten years in the market. It can take real muscle to wait through that. But again, if you have the right portfolio, it won’t let you down over the long run. You have to stay the course. So, remember that the number one rule in investing is buy low and sell high. So, never, ever, ever, ever get scared and sell low. People who get scared or lose faith and sell out lock in losses and unfortunately add to that they’re often left with severe post-traumatic investing disorder. I made that term up, but I’m sure you get what it is and then they never go back to investing. So, don’t do that.


Again, market downturns aren’t anomalies. They’re expected. We know they’re coming. When the market takes a dip, it’s not a signal to panic and abandon ship. It’s really important to stay committed to your plan, revisit it, fine-tune it, but don’t abandon it at the first sign of adversity. Over the long run, it is not daily fluctuations that are going to matter to your end values, to what really impacts your financial life, your ability to spend your money that you earned, and you invested. What impacts that is really your consistent strategy. Okay. So, stay consistent. Stay with the plan.


The next strategy I want you to consider and adopt today is the magic of consistency. So, monthly contributions and their compounding effect. Let’s talk about the compelling power of consistent monthly contributions. So, imagine you got a magic penny that doubled in value every day, starting with just a single cent on day one. By day two, you’d have $0.02, day four $0.04. That doesn’t sound like much, but this magic penny, it keeps doubling for a whole month. You get 30 days of doubling. By the end of day 30, you have not 5 million pennies. You have $5 million. So, that’s the magic of exponential growth. The stock market isn’t quite as fantastic as our magic penny. Obviously, the stock market doesn’t double every day. Ha ha ha. But the principle is similar. So, let’s consider a more grounded example. Imagine you start investing just $100 every month, and you do that for 40 years at a return of 7%. $100. Many of you listening can carve out $100 from your monthly budget and you get a return of just 7%. There’s probably ways to earn more than 7%. We’re being conservative today.


So, over 40 years, you would have contributed $48,000 but the end value of your account is over $200,000 higher than that at $263,000. That’s the magic of compound returns. The majority of that growth it’s not the money you initially invested. It comes from returns on the investments which like I talked about before, then earns returns of its own. So, that’s the beauty of compounding. Your money works for you and then that money’s money works for you and so on. So, you can start now, continue on your path, and stay consistent. Just start contributing monthly. Increase that amount as soon as you can and don’t stop. Small, consistent amounts really lead to substantial growth over time.


Okay. The next investment strategy is more behavioral, more conceptual. It’s the power of financial independence and the power of your saying no. Let’s get real. All of us have at some point been offered unsolicited financial advice. I call this your armchair financial advisor. Nearly every woman has one. It can be a casual coffee chat or family gatherings. There’s almost always someone telling you what to do with your money, especially when it comes to the stock market. But here’s where your strength that you’re earning, listening to this podcast, educating yourself about what it takes to succeed financially, and that’s where your strength comes into play. The power to say no is about so much more than rejecting advice. It really is a declaration of your financial independence. It’s you taking control of the reins. It’s you acknowledging that your investment decisions are rooted in knowledge and education like you’re getting today and the robust evidence we talked about earlier.


So, to move beyond being someone who feels compelled to take tips and tactics from someone who doesn’t work for you and doesn’t answer to you, you need to trust in your understanding of the stock market or trust the fact that you hired the right financial advisor who does. Recognize that you, armed with evidence-based strategies and a long-term plan and good behavior around your savings, have what it takes to navigate the world of investments. I mean, of course, listen to others. Take into consideration what they say. See how it jives with what you’ve learned and how you choose to interact with your stock market portfolio. But my experience is most people who talk about the stock market like they understand it don’t actually understand it as well as you will after listening to this podcast and internalizing its lessons. So, now that we’ve said no to bad advice, you’re taking that on. You’re arming yourself with that weapon, that defense strategy called, “No, I hear you. Thanks for the advice. Didn’t ask for it. I’m going to pass.”


Now that you’ve got that in your arsenal, let’s talk about diversification. So, as we talked about at the top of the episode, in the context of real estate, at its heart, diversification is a risk mitigation strategy. It’s not putting all your eggs in one basket. So, before we were talking about how to buy one house or one condo and rent that out as your investment, it’s not diversification. There’s too many things that can affect that one property. But now we’re talking about buying many, many, many, many stocks in the stock market. By spreading investments across assets or types of companies, you’re essentially ensuring that potential losses in one area could be offset by gains in another. It’s about mitigating the impact of the ups and downs of the financial market on your account balances. So, you create like this balanced environment, okay? It means not limiting yourself to a particular segment of the market. You want different asset classes, industries, and even geographies in your portfolio because those are going to thrive at different times under different economic conditions.


A way to accomplish this diversification, a very popular and a good way and a low-cost way is to consider index-based funds. Picking individual stocks or bonds is really a hassle. An index-based mutual funds and ETFs, ETF stands for exchange-traded funds, are a valuable resource. I’m not going to discuss the difference between mutual funds and ETFs today. If you’re picking index-based mutual funds or index-based ETFs, you’re in the right place. That’s like the right area for you to be and it’s not really important to get into the nuanced differences of those two different vehicles. We could do that at a later time. So, these funds, when they’re index-based funds or index funds, mirror the performance of a specific market index, which is a representative basket of companies. And this allows you to get a piece of the entire segment of the market at a really low cost. For women who want a straightforward, effective way to diversify index-based mutual funds and ETFs can be a game changer.


With them, you’re not trying to beat the market. You’re aiming to be in sync with it, which is definitely what I recommend. It’s like being the tortoise versus the hare in that old story, The Tortoise and the Hare. Remember, the tortoise wins the race, and what the data tells us bears out the best economic outcomes for individual investors like you and me. So, while we’re on the topic of diversification, it’s hard not to give a special mention to a company called DFA. That stands for Dimensional Fund Advisors. They produce mutual funds and ETFs, and they are the mutual fund company my firm works with and I’ve been working with that fund company for more than 20 years. I don’t have a permanent relationship or an embedded relationship with them. As an independent advisor, I have access to the entire universe of investments. So, if I thought someone was doing better than DFA, I would take my clients there. Okay. So, I’m not married to them. I’m just a big fan.


They take a unique approach. They blend traditional indexing. So, index funds like an index fund construction or foundation but they have flexible management strategies. So, why they’re different is because instead of trying to be in sync with a market index, they look for evidence-based strategies to increase returns. So, the benefits of index funds with some additional benefits that index funds don’t have. So, kind of a few features that can turn the dials and can produce higher returns than index funds or ETFs produce. So, unlike regular mutual funds or ETFs, which you can buy really anywhere, Schwab, Vanguard, really anywhere, you can’t buy DFA funds on your own. They’re only available through certain financial advisors like myself and that kind of access can be just one more benefit to getting professional guidance so ensuring that these specialized funds are integrated into your portfolio and allowing you to potentially increase your long-run returns.


Let’s take a quick step back. I feel like we’re in the right place in the conversation to talk about ethical investing. It is hard to ignore the rising tide of global news about ethical investing. It’s popular. People are talking about it. There’s been a lot of chatter about aligning investments with personal values. There are small sort of bite-sized and easy ways to do this, and that’s commendable. I mean, of course, we all want to invest in a better world. It does come with its own set of challenges. First of all, the definition of ethical is really subjective. So, what’s ethical for one person might not be for another. And limiting investments based on ethical criteria might reduce diversification in the fund. So, if you’ve got 100 companies in a fund and you take 20 of them out, you’ve obviously reduced your diversification by 20%. So, you really do have to because that might affect performance. It definitely affects risk. It’s critical to weigh the pros and cons and understand the tradeoffs involved. Okay.


So, my view is always what maximizes the chances of success for my clients. And at this time, while we do have ways for our clients to invest ethically, it’s just in order to be fully adopted for me to give it an unequivocal thumbs up, it really needs to prove its mettle and strength a little bit more. Again, I know that’s high level. I’m just saying it’s not something to just leap into and think, “Oh, I can definitely do this and still implement the investment strategies Hilary was talking about that day,” because a lot of those ethical funds, once you start to bake in the kinds of nuanced choices that many investors want to make, you reduce diversification and you leave yourself with an unknown expected return.


Okay. Next strategy. The final strategy that we’re going to discuss today that will, in my opinion, prove to be a very smart choice for you over the long run is to choose to work with a fee-only fiduciary financial advisor. We really can build a valuable partnership with you over time that maximizes the chances you’ll achieve all of the things that are important to you. So, let me say a little bit more about that. Fee-only advisors like myself and fee-only is distinct from fee-based. Fee-only advisors like myself and my team do not earn commissions from selling products. Fee-based means you earn fees and commissions so you won’t look for fee only. Our income comes solely from the people we work for and whose interests we serve. That’s our clients. This minimizes conflicts of interest between you and your financial advisor. So, our advice is not tainted by outside incentives. You want that. Also, fiduciary advisors are bound ethically to act in your best interest. We don’t have hidden agendas. We literally just want you to meet your financial goals.


But don’t just take my word for it. Let’s see what the data says. For years, Vanguard has been publishing a study titled Quantifying Advisor’s Alpha. Used in this context, the word alpha is a finance term that measures an activity’s return on investment or ROI. In this study, Vanguard demonstrated financial advisors can add significant value beyond just investment strategies. Vanguard’s study found that advisors can add on average about 3% in net returns on an annual basis when incorporating best practices in wealth management, including the behavioral advice financial advisors can give. Of course, not all financial advisors give behavioral advice, so you want to look for that. My firm and my team specialize in giving behavioral advice. We help guide your financial choices by understanding the psychology behind why you do what you do.


There’s also a study from Morningstar titled The Value of a Gamma Efficient Portfolio. So, Morningstar coined the term Gamma. We’re going with the Greek alphabet here. I assume just so they can have their own special term that isn’t Alpha. I mean, Alpha is universally used in the finance world. Gamma is new, but Morningstar coined it. They say it quantifies the value of intelligent financial planning decisions, which are key. They found that the average investor is likely to benefit significantly from working with a financial advisor so long as the advisor provides comprehensive, high-quality portfolio services for a reasonable fee. So, you can find links for both of the studies I just mentioned in the show notes for today’s episode.


Okay. But not all financial advisors have the same knowledge and experience, so I would recommend you look for an advisor that takes a holistic view, offers tax strategy, customized cash flow planning, planning for various stages of your life, including pre-retirement and retirement and estate planning techniques. There are obviously lots of very smart financial advisors out there, so it’s important to find someone who will not only take your goals and priorities into account but who will also serve you the way you want to be served. Taking the time to find the right financial partners in your life can be one of the best investments of your lifetime. So, using the strategies we discussed today, you can arm yourself with knowledge, align yourself with educated professionals who genuinely have your best interests at heart, and then experience becoming more and more optimistic about your financial future.


Okay. So, that is a high-level discussion of fantastic investment strategies for women. Of course, investing has both opportunities and challenges. I experience them myself. I am not immune to the challenges of investing. However, they can be surmounted. But through every unprecedented market event, the underlying themes remain consistent: evidence-based decisions, the power of a long-term vision, the value of diversification, and the importance of getting wise guidance. Really, intelligent investing does not require guessing about what the future holds and most certainly does not require trusting prognosticators or the media to manage your money. It’s about leveraging numbers and data, harnessing these tools to sculpt our financial freedom. Financial empowerment is about choice, choosing where to invest, whom to trust, and how to manage risk. It’s about understanding that while markets fluctuate, your resolve to thrive can and should remain unwavering. I really encourage you to embrace the principles we’ve explored today. Ask questions, seek guidance, and always look for an informed perspective. Your financial journey is a lot like life itself. It’s really a blend of strategy, wisdom, adaptability, and heart.




Hilary Hendershott: If you would like to reach out to talk with me and my team about whether we might be a good fit to work together, you should know that all initial conversations are totally complimentary. To get started, you can either fill out the contact form on my website at HendershottWealth.com/contact. That’s Hendershott. A lot of people try to spell my last name with a C, but there’s no C. It’s not S-C-H-O-T-T. It’s H-E-N-D-E-R-S-H-O-T-T. HendershottWealth.com/contact or find the link to that contact form in the show notes for today’s episode. Thank you for listening to the Love Your Money podcast. If you haven’t already subscribed, please do that now. And if you loved today’s episode, go ahead and leave me that five-star review.


Hendershott Wealth Management, LLC and Love, your Money do not make specific investment recommendations on Love, your Money or in any public media. Any specific mentions of funds or investments are strictly for illustrative purposes only and should not be taken as investment advice or acted upon by individual investors. The opinions expressed in this episode are those of Hilary Hendershott, CFP®, MBA.


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