Amongst other things, women typically receive a bad rap when it comes to investing, being labelled as highly risk averse and nervous decision makers. It’s assumed that they’re uncomfortable investing in stocks, very cautious and aren’t great when it comes to numbers. Of course, none of this is true, apart from the fact that it may be an excuse for being intimidated by a typically male-dominated area and being unsure of financial terminology and inexperienced.
However, many of these statements are riddled with outdated stereotypes which is why Fidelity Investments’ latest study “2021 Women and Investing Study” shares a welcome change for women in investing.
The study showed that 67% of women are now investing their savings (not including retirement accounts or emergency funds) into the stock market. This is a huge increase from 2018 showing a 50% rise. It also found that over half (52%) are looking to create a financial plan that will see them work toward their goals over the next financial year.
What’s more, an analysis of annual performance across 5.2 million accounts, dating from January 2011 to December 2020, showed that on average, female investors surpass men by 40 basis points or 0.4%.
Lorna Kapusta, head of women investors and customer engagement at Fidelity said that the study results “demonstrate that women are great investors, and when they take action, it can work out quite well for them.”
Unfortunately, when it comes to taking action, the study showed that merely one third of women could visualise themselves as investors. 42% of women admitted that they’re confident in their ability to save wealth for their future, with a miniscule 33% confident in making their own investing decisions.
Money has been seen to be a troubling aspect of life for many, however a worrisome 77% of millennial women admitted that thinking about finances has been the cause of losing sleep. This is accompanied by 73% of Gen X females and 59% of boomer women. 32% are kept up at night due to the fact that they don’t feel they are earning enough money and 37% say it comes down to being unable to manage their debt. More than 50% worry about their long-term finances.
An increasing commitment to saving and investing for the future has been seen over the past year with Fidelity noting that they’ve witnessed unprecedented growth in women opening new retail investing accounts, with a record 43% year-over-year increase since last summer. There has been a 37% increase in women calling financial consultants and using online planning tools over the past two years. Females are also now contributing a record-high average 9.2% to workplace savings accounts.
The shining light from this study is that when women do start to invest, they do often see results and as mentioned above, have outdone their male counterparts. What this calls for is an increased motivation from women to learn about finance, to become financially literate and to start talking about money. Thankfully, the momentum for women to become more hands-on with their finances has continued since 2018 even as COVID19 has disproportionately impacted women when it comes to financial stress, home/family responsibilities and job security. What we need to from here is to continue to encourage the women in our lives (and remind ourselves) that there is a great deal of opportunity that can come from investing and that financial goals are certainly achievable.