Women and Investing
The conventional wisdom has it that women are in trouble when it comes to investing: read a few articles, and you may come away with the impression that they are less knowledgeable, less confident, and less interested in investing than their male counterparts.
But this take may be an oversimplification that underrates the real progress that women are making when it comes to owning their financial success. A recent iShares study, conducted in 20161, has revealed several positive trends in women’s relationship with investing.
A prior version of the study, conducted in 20132, showed that true to the stereotype, women seemed to lag men in their investing confidence. Just over 1 in 3 women agreed that they were sufficiently confident to make their own investing decisions, compared to half of men. Perhaps unsurprisingly, men’s confidence had not diminished by 2016 — but women had nearly closed the gap: 48% of women now reported feeling confident to make their own investing decisions.
Our study also showed that women are not only feeling more in command of their investing decisions, but also enjoying the process more. The percentage of women agreeing that they “feel a rush” when choosing investments was only 14% in 2013. By 2016, that number had more than doubled — 36% of women were exhilarated by investing.
Interestingly, women also showed an increasingly open outlook to different investment vehicles. Ownership of different kinds of investment vehicles increased in each category we asked about. The most dramatic growth by far was in ETFs. In 2013, only 24% women owned or had owned ETFs; by 2016, that number had grown to 44%.
It’s a bit of a chicken-and-egg question: do women’s more positive feelings create a more adventurous outlook to investing, or does the success of a diversified approach feed women’s confidence? Whichever came first, it’s likely that the trends are reinforcing each other. And they may actually be leading women to spend more time on their investing. In 2013, women responded that they typically spent 2.3 hours a month on their finances. By 2016, that figure had risen by over 50%, to 3.6 hours a month.
More time spent engaging with finances probably is better — up to a point. Our survey also suggests that women may believe that the “best” investors are the most active and engaged traders. Women were more likely than men to agree that they would change their portfolios more often if they were more confident, and that changing a portfolio frequently is the best way to stay on top of the market. Here, women’s caution may be doing them a favor — staying invested in the markets is key to capturing upside during good years. By combining prudence with confidence, both men and women can build their best financial futures.
This post was originally posted on iShares.com
The 2016 study was conducted between May and June 2016 by Illuminas, an independent research company. The survey interviewed 2071 US end investors from nationally representative online samples of household financial savings/investment decision makers age 21–75, with $100K+ in investable assets. This study was sponsored by BlackRock.
The 2013 study was conducted between November and December 2013 by Rosetta, an independent research company. The survey interviewed 2,556 US end investors from nationally representative online samples of household financial savings/investment decision makers age 21–74, with $100K+ in investable assets. This study was sponsored by BlackRock.