Let’s be real: the investing world is way too male-dominated. Most high-level investing positions are filled by men. There are more male C-level executives in publicly traded companies than women. There’s also the issue of a disproportionate income gap that women valiantly combatted for decades, yet still exists in many workplaces. Despite numerous recent advances in combatting gender bias in society, it still remains very real in finance.
According to a new report, it shouldn’t be. Sure, you don’t need an expertly researched report to tell you that the finance world should be oodles more inclusive than it is. Yet as Fidelity discovered, women are better at investing than their male counterparts. How did Fidelity come up to this conclusion? More importantly, what does it mean for the future of investing?
Women investors outperformed their male counterparts by .4% in 2016.
Four percent might not sound like a lot, but it could mean a decent chunk of change when talking about individual investors. Over time, it could mean the difference between retiring early and working well into retirement. This news isn’t all that new, either. Fidelity previously found that women not only made better returns last year, but in the last decade, too.
Women are better savers, too.
Women saved an average 9% from their total pay last year. Men, on the other hand, saved an average 8.6%. That’s the same .4% difference as before, which could add up a lot later in life. This stat goes hand-in-hand with the findings that women are more likely to hold onto their stocks, while men are more likely to trade them at a higher frequency. This enables women to make bigger long-term gains than their male counterparts.
Women investors are less confident than men.
According to a 2013 study from financial firm BlackRock, only 48% of women polled considered themselves stock market savvy. This is contrasted by the 57% of men polled who thought the same. A 2015 Merrill Lynch study also found a disproportionate amount of women and men who were comfortable with their market smarts.
There’s no “right” way to invest as a woman.
Despite some services marketing themselves in a certain way, there’s no such thing as “investing, but for women.” Your broker or brokerage does not care about your gender. Your stock will perform the same way as every other person investing in the same company. Though the bulk of all financial services are male-run and male-targeted, they don’t exclude women from using them, as with ’60s country clubs.
Certain ETFs exist if you want to invest in the advancement of women in the workplace. These funds, like $SHE, follow indexes that track companies with female C-level executives or companies advancing women’s rights. Sadly, many of the companies running these funds are male-owned and operated. One can only hope they don’t stay that way forever.