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Women and Investing: What the Research Says

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Kathleen Edwards guest posts today on a very interesting topic: Women and investing. What does research tell us about female investors? Are women winning the investment game? Find out here.

The National Partnership for Women & Families report revealed that women make just 80 cents for every dollar that men make. The good news is that there are multiple arguments and movements being put forward to beat the gender pay gap, but, whilst women are being paid less, they have to be more careful with their cash. As a new study reveals when it comes to women and investing, females are usually more sensible and are making more cash than male counterparts, it begs the following question. What are women doing right that men aren’t?

Investing wisely

A new study from Warwick Business School looked at the performance of 3,000 stock broking investors over a three year period. At the end of the study it was revealed that female investors beat the Financial Times Stock Exchange (FTSE) 100 by 1.94% a year, whereas, the male participants achieved just 0.14%. Another study found that women know when to cut their losses sooner than men. The Merrill Lynch study revealed that 35% of women kept an investment for longer than they should have, compared to 47% of men.

women and investment

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Spending when the time is right

Studies on women and investing have shown that females trade less often than males. According to the JM Coates 2012 study, just 5% of traders are female, but this 5% know exactly what they’re doing. Typically, female traders will only trade when they know that the investment is worthwhile and will make them cash, meaning they hold back until a sound investment comes along. On the flip side, men trade more often and are more likely to splash their cash on risky and exciting investments which too often don’t pay off.

Risk averse females

Being risk averse isn’t a bad trait. In fact avoiding risks is helping women to rake in more cash in investment opportunities each year. The Barclays Wealth and Ledbury Research study reveals that because females are less confident than men, they take fewer risks and make more money as a result. Women don’t like taking financial risks as they know that it can impact their savings and long-term financial health, including their rainy day savings.

Having emergency savings to fall back on is important and has been widely encouraged since it was revealed in the Credit Union National Association’s Women’s Financial Survey that just 43% of women have an emergency fund, compared to 63% of men.

On women and investing

The personal finances of the nation’s female investors are far healthier than males due to the savvy ways women work the market. Numerous studies have found that women make wiser financial decisions when investing and that their risk-averse nature helps to secure them a good deal.

About today’s writer

Kathleen Edwards is a freelance writer and editor. She specializes in health and finance topics and loves the research process involved in her job. When not working she loves to travel with her son, music and hiking.

Do these findings on women and investing surprise you? Let us know in the comments section below.

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12 Comments

  1. Sue Dreamwalker August 14, 2018

    A very interesting article Christy.. Women are prudent and wise when it comes to budgets and savings… How else would we manage the ‘house-keeping’ and bills etc.. ;-) Big smiles..
    Hope alls well, sending Big Hugs your way .. <3

    Reply
  2. broadview11 August 14, 2018

    Investing is hard when your a teenager that’s for sure

    Reply
    1. Christy B August 25, 2018

      Totally

    2. The Obvious Investor October 3, 2018

      It’s more important than every to start to look at investing correctly when you’re a teenager. I left it a little late (20’s) but I’m so happy I stuck with it and figured it out in the end.

      Stick with it, you’ll get there :-)

      @Christy B, great blog BTW!

      Mark

    3. Christy B October 3, 2018

      When you start investing earlier in the teen years, the future is even brighter! Thanks Mark for the encouragement :)

    4. Engineering Entrepreneur February 4, 2019

      This is what I’m talking about!

    5. broadview11 October 3, 2018

      Thanks

  3. Investor Blitz August 28, 2018

    I have a 14 year old daughter, and I am starting to teach her about investing. I did not start until about 5 years ago, and I wish I would have started 20 years ago, lol. If my daughter listens to me, takes my advice, and starts to form her own way of investing, she will be in GREAT shape when she is my age.

    Reply
  4. grizzlybearfinance September 5, 2018

    Hit the nail on the head. I talk about this with my wife all the time. It’s much harder for men to admit when we’ve made a mistake (take our losses). Women are therefore more likely to succeed because they lose less and that balances better at the end of the week. The age old argument of: 2 steps forward, one step back

    Reply
  5. simplefinancelessons October 30, 2018

    It makes sense that women tend to be more risk averse… men tend to be reckless sometimes. 😅 I wrote a little article about some ways to manage risk in a correcting market, consider checking it out and leaving some feedback!

    Reply
    1. Christy B October 31, 2018

      It’s interesting to read the investing research, for sure!

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