Christine Marshall* is a seasoned investor who has money in Registered Retirement Savings Plans and numerous funds, but it’s her earliest investing adventures that she’s most fond of. “My grandparents bought me shares in Irwin Toy when I was very young,” she says, still excited by the memory. “I went to the shareholder meetings and got free toys.”

Eventually, the 35-year-old, who works in human resources in Toronto, outgrew the freebies, but she hasn’t lost her desire to save and to see her money grow. Now, as a new mom with a mortgage and a husband, Marshall is grateful she caught the investing bug at a young age. “Start early,” she says. “It can give you a sense of freedom and independence if other things don’t turn out right.”

Unfortunately, not many of us have money-minded grandparents like Marshall’s to put us on the path toward financial security. TD Waterhouse’s 2008 Female Investor Poll revealed that two-thirds of women have little or no interest in investing and don’t pay attention to financial markets. Of those of us who are financially aware, fewer than four in 10 regularly contribute to an RRSP, and only 25 percent seek professional investment advice. Patricia Lovett-Reid, a senior vice-president at TD Waterhouse and the author of Take Charge Now: A Woman’s Guide to Personal and Family Finance, says a few misconceptions, such as the idea that you must be a math major to make money in the market, still hold women back from becoming financially independent. “All you need is $25 in a balanced mutual fund and you can start to take control,” she says.

Still, even if you have a few bucks saved up, it’s hard to know where to put them. There are a massive number of investment products, and a ton of companies vying for your hard-earned cash. So before a newbie investor gets into the game, with or without an adviser, it’s vital that she research her options. “I read a great deal,” says Sarah Coombs, a single, Toronto-based public-relations professional in her mid-thirties who relies on financial newspapers, business magazines and websites such asGlobeinvestor.com to help her make her decisions. “If you don’t pay attention, you don’t have any right to complain about a bad return.”

Stock answers
While it might be tempting to buy that hot new stock that Canadian Business is talking about, most certified financial planners (CFPs) advise sticking with a mutual fund, which is essentially a collection of bonds, stocks and cash. The return – the fund’s gains and losses – is dictated by how well each part of the bundle performs. While you can’t choose what’s in a fund, this option is generally more stable than owning a bunch of shares in a couple of companies. “Mutual funds maximize returns while minimizing risk,” says Frank Wiginton, a CFP with TriDelta Financial. “Investing in them is the simplest way to do that.”

But what if you’re really keen on owning a specific company? Prepare to be a risk taker. Exhibit A: Lululemon. In the three months after the Vancouver- based yoga clothier began offering its shares to the public in 2007, the stock price skyrocketed to $55 from $28. Not bad, right? Well, after hitting that peak price, the stock dropped to less than $10 at the end of 2008. “If you buy from only one company, you’re taking on more risk than you should in any type of market,” says Lovett-Reid.

Would-be investors who aren’t keen on owning volatile stocks might look at bonds, an investment option generally issued by governments and corporations. Governments raise money by offering bonds to the public. You hold that bond until maturity, which can be anywhere from 30 days to 30 years, with interest paid twice a year. Bonds are considered one of the safest investments (as witnessed by their relatively stable performance in the recent market crash) because there’s almost no chance the government will go bankrupt, although corporate bonds are riskier than government ones.

The problem with bonds, however, is that they rarely produce the same rate of return as a stock or mutual fund. Generally, a balanced mutual fund will pay back about seven percent on an investment if you’ve had it at least 10 years, while bonds currently yield between one and 3.5 percent. Investors can also get hit with a loss if they trade their bonds in early. “The belief that you can’t lose money in bonds is very wrong,” cautions Wiginton.

Coombs’s savings have been placed in a balanced fund by her financial adviser. She says she’s always been risk-averse, so this option suits her well. Marshall, on the other hand, is slightly more aggressive. She invests in exchange-traded funds – a cross between a mutual fund and a stock – and she buys and sells on a more regular basis than Coombs. That could change, though. “With my new baby, I think I’ll become more conservative,” she says. “Since I have more commitments and less disposable income, I’ll want to protect my capital more.”

Get some guidance
Once you’ve decided how risk-averse you are, you’ll need to decide where you’re going to put your money. These days it’s easy to be a do-it-yourself investor. (For all the info you need, see “How to be your own investment adviser” on page 87.) All the major banks offer online investing options, and sites such as E*Trade and ING Direct allow easy access to countless mutual funds, stocks and other products. When Marshall started investing on her own, she did everything over the web, learning about products as she went. But now, with her family expanding, she can’t micromanage her investments. “Time is a big constraint for me,” Marshall says. “I don’t have time to read about funds, and my job is demanding.” Instead, she hired a financial adviser to handle everything for her.

Lovett-Reid adds that the professionals won’t just talk stocks; it’s their job to create an overall financial plan. “When I talk about women taking control of their finances, I talk about managing debt, paying less tax and having a quantifiable investment strategy,” she says.

Though advisers can help, it’s important to know that many of them work on commission; they get a cut if they sell you a product. Marshall always discusses big moves with her commissionbased adviser in detail. Her top three questions typically are “How does this investment fit with my overall portfolio goals? What are the incentives for brokers to sell the product? And what is the product’s five-to-10-year history of return?” Coombs, however, gives her fee-based adviser (she pays a set annual amount for her financial-planning needs) more discretion over her portfolio.

Whatever route you take, investing your money beats leaving it in a lowyield savings account any day. Managing your own finances is critical, not just for retirement planning, but in case of divorce, death or emergencies. “Women need to have control over their financial destiny,” says Lovett- Reid. “No one is responsible for you. Be an active participant in your life.”

(*A confidentiality rule at the bank where she works requires her to use a pseudonym here.)