It is often stated that without taking risks, one cannot reap rewards.
This sentiment is well understood by Jennifer Shahade, a renowned poker and chess professional and the author of “Play Like a Champion.” “In poker, risk and managing risk is crucial,” Shahade emphasized during the CNBC Women & Wealth event held on Tuesday.
Shahade highlighted the delicate balance required in risk-taking. “If you risk too much, you will quickly lose your money,” she explained. “But if you don’t take enough risk, you will still lose your money, albeit slowly.”
She continued, “It’s all about finding that equilibrium. I often advise women who may be hesitant about taking risks that not taking any risks is, in itself, a risk.” Shahade emphasized the lessons learned from poker and their applicability to life and finances. “Playing poker teaches you that lesson, and ideally, you can apply it to various aspects of your life, including your finances,” she remarked.
The key takeaway, according to Shahade, is self-awareness. She relies on a blend of intuition and data to make timely decisions. “You need to identify those opportune moments,” Shahade asserted. “This requires a combination of analyzing data and trusting your instincts.”
Nancy Tengler, CEO and Chief Investment Officer of Laffer Tengler Investments in Scottsdale, Arizona, echoed similar sentiments regarding women and investing. She referenced research from Fidelity Investments indicating that women tend to achieve positive returns and outperform men by 40 basis points.
However, Tengler cautioned against the tendency among women to hold excessive cash and feel the need for more knowledge before investing. “The greatest risk to women’s portfolios is their reluctance to take sufficient risks,” she warned.
Tengler emphasized the importance of active participation in the market. “By remaining on the sidelines, women risk missing out on the market’s best days or failing to capitalize on investment opportunities that may temporarily underperform,” she stated.
She encouraged women to invest in quality companies for the long term and to consider adding to their investments over time. “If you invest in excellent companies that you can hold onto for a lifetime, it often makes sense to increase your holdings,” Tengler advised. “While it may take some time to see returns, that’s why you maintain a diversified portfolio.”
