Moms, Money and Markets: Why Women Make Great Investors

By Angela Grannan on May 11, 2023

“Who runs the world?  Girls.”  Beyoncé

I was working out to this song recently, and it made me think of this blog. (I know! Workouts are supposed to clear your mind, but I can’t help myself!) In honor of mothers and women in general, I thought I would dig into our role as investors and where we stand today. 

First some facts to consider:

• Nine out of 10 women will eventually take charge of their family’s wealth.
• 41% of women are their family’s breadwinner or co-breadwinner.
• Women control a third of total US household financial assets—more than $10 trillion.[1]

Despite these impressive statistics, women’s retirement income is 83% of men’s and women are 80% more likely to become impoverished after age 65.[2]Because women earn less per dollar than men ($.84 on the dollar) and often take time off work to care for others, they typically have a smaller nest egg than men of similar age.[3] But no need to let that get us down! There are a lot of positive trends when it comes to women and investing. 

First, more women are investing. 

Two thirds of women invest outside of their retirement plans (up from 44% in 2018). Younger women are really getting into the act.  71% of millennials have opened investment accounts outside of their retirement accounts. The CFA Institute predicts that by 2025 there won’t be a meaningful gender gap in stock market participation in the US. This trend will be women’s friend. Thanks to compound interest those extra years of investing will make a huge difference in savings.[4]

Here’s more interesting news; women outperform men when it comes to investing. 

We achieve higher returns while taking less risk. There are several reasons for this outperformance. Women tend to avoid impulsive decisions and remain calm during market volatility. Women are also less active investors. We log on to our accounts less frequently (we are too busy running the world!), and we trade 40-45% less frequently. Finally, we tend to take less risk and are less likely to hop on the investment trend du jour, such as crypto currency and meme stocks.[5]

The funny thing is that even though women outperform when it comes to investing, only one third see themselves as investors and the majority don’t feel confident when making investment decisions. A 2021 FINRA study determined that there is a knowledge gap between men and women when it comes to investments. However, women are interested in learning and are more likely to seek education and advice from wealth advisors. Women are also more interested in creating a financial plan and sticking to it. A more disciplined approach when it comes to investing and financial planning benefits female investors in the long run.[6] 

Great News: It’s not too late to get started

If you’re reading this and are getting major FOMO (fear of missing out), don’t worry it’s never too late to get started! Read our blog “Investing: I Can(t) Right Now?” This Mother’s Day, give yourself a gift: Start saving and investing as early as possible, work with an advisor, get educated on investments and create a financial plan, all while running the world! 

Happy Mother’s Day!

[1] https://www08.wellsfargomedia.com/assets/pdf/personal/investing/investment-institute/women-and-investing-ADA.pdf

[2] https://www.fool.com/research/women-in-investing-research/

[3] https://www08.wellsfargomedia.com/assets/pdf/personal/investing/investment-institute/women-and-investing-ADA.pdf

[4] https://www.fool.com/research/women-in-investing-research/

[5] https://www.fool.com/research/women-in-investing-research/

[6] https://www08.wellsfargomedia.com/assets/pdf/personal/investing/investment-institute/women-and-investing-ADA.pdf