Are Women Better Investors?

Why women are better investors: study,” Reuters discusses a Fidelity investments survey and an academic study which found that women save more than men and that their investments also earn more. The survey found the savings and the investment advantage women have over men is 0.4 percent, adding “…the disparity at retirement age is anything but minor. For a 22-year-old starting out with a salary of $50,000 a year, a woman investor will outpace her male counterpart by more than $250,000.”

The article revisits the idea that people presume that men are better investors with women since less than 10 percent of the survey respondents agreed with this idea.

It also points to possible explanations for women may have the edge when it comes to investing:

  • Women save more in 401(k)s at work and in IRAs and other accounts
  • Women tend to invest in less risky investments
  • Women diversify their investments more than men do.

Overall, the article states that women take a long-term approach to investments by saving more earlier and being less interested in making noteworthy trades. The article concludes with an expert opinion that men pick their stocks for bragging rights.

In “The Secrets of Women Investors,” Kiplinger examines this same topic and is more analytical about what may seem like stereotypes:

“Of course, men can be marvelous investors, too, and in some areas women would be wise to take their counsel. But women have a different and valuable approach that can help almost anyone become a better investor.”

Along with their strengths such as investing in what they know, tempering risk, thinking long term, trading sparingly, and selling with discipline, Kiplinger found that in contrast to the Fidelity survey, women save less. Kiplinger also cited a study which found women tend to be less knowledgeable about investments then men, perhaps because women may be reluctant to discuss money.

No matter who you are, if you’ve been hesitant to examine your finances, you can work with a Fee-Only financial planner.

©Bring Clarity to Your Finances™. Are Women Better Investors? is a post from Bring Clarity to Your Finances™

About the author

Claire Emory, MBA, CFA, CFP®

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