The prevailing opinion on women as investors within the financial community has been that women are “risk adverse” compared to their male counterparts in relation to their financial portfolios. Further, from a larger social perspective, women are often viewed as more emotional than men, even though men show equivalent, if different emotions: crying for women is equivalent to anger for men.
The combination of these two perceptions, has resulted in a general stereotype of women being poor investors compared to men. Longitudinal data proves otherwise: by and large women have different styles compared to men, but their portfolios are just as robust. Below are 4 articles and studies that delve into the topic of women and investing.
1.Women Investors Buck Stereotypes: A Powerful Yet Misunderstood Economic Force (article)
Capital Group – 2017
Summary:
- Millennial women are investing at higher rates than preceding generations.
women investors –
- Personally encountered negative stereotypes about their financial acumen
- Believe they have more economic power as investors than in the workplace
- Have higher expectations than men for the companies in which they invest
- Are not risk averse but do want protection against market downturns
2. Women & Financial Wellness: Beyond The Bottom Line (report)
A Meryl study conducted with Age Wave – 2018
Summary:
- Women spend significantly more time caring for family and less time earning, compared to men.
- There is approximately a $1 million dollar difference in the average female and average male portfolios, though that number changes when comparing women and men with similar earnings.
- Women’s interest in investing is directly related to how it benefits their family.
“Women make more values-based decisions for themselves and their families, rather than just going for the bottom line. When you bring values into the conversation, it makes all the difference.”
Jeanette Schneider, Senior Vice President & Private, Client Advisor, U.S. Trust
3. Fidelity Investments Survey Reveals Only Nine Percent of Women Think They Make Better Investors than Men, Despite Growing Evidence to the Contrary(report)
Fidelity Investments – 2017
Summary
- On average, women performed better than men when it comes to investing by 40 basis points, or 0.4 percent.
- Women Save More: In workplace accounts, women save 9% of their paychecks compared to men who save 8.6%. In outside accounts, women added an average of 12.4 percent to their account balance, compared to 11.6 percent for men.
- Women are more sensitive to risk, but also exhibit more patience.
- Women think holistically, and plan with purpose.
4. Women trade less often than men, with better results (article) – Financial Times – 2020
Summary
- Women trade less often than men statistically.
- In a downturn, women tend to make more consistent trades than men, and tend to pull less money out, which results in better long-term returns.
- Women are often viewed as risk-adverse, but this is a common misconception. Women simply require more information prior to trading. This tendency to exhibit a slightly slower response, and more patience, improves women’s portfolios compared to men’s in a time of volatility.
I started the Value and Invest Academy to support women in feeling completely confidence in their finances by aligning their values and their daily behaviors. You can look into my courses and coaching at Value and Invest Academy.