The importance of investing for women

In today’s rapidly evolving financial landscape, it’s more important than ever for women to take charge of their financial futures. Investing is a powerful tool that’s been historically dominated by men, but in the past several decades, women have been putting giant cracks in the glass ceiling to harness the immense potential available to them through investing.

Let’s explore some facts about women in investing to inform and inspire.

• For most of American history, women were shut out of investing; in fact, until 1974, women couldn’t legally obtain their own mortgages. Despite that fact, women make for savvy investors, thanks to their intelligence, awareness of risk, and patience. A great historical example of this fact is Abigail Adams, wife of John Adams, the second president of the United States. Though she received no credit for it at the time, Abigail was a savvy investor who was responsible for her husband’s vast wealth.
• Women are getting more and more involved in the investing world — to their advantage. The percentage of women who invest outside of retirement grew from 44% in 2018 to 67% in 2023. Interestingly, only a third of those women investing outside of retirement see themselves as investors.
• Generationally, 71% of millennial generation women are investing outside of retirement, compared to 67% of Gen Xers and 62% of baby boomers.
• According to a study from FINRA, while 27% of female respondents have non-retirement investment accounts, 43% of men report that they invest outside of traditional retirement vehicles. Women also currently control more than $10 trillion, or roughly 33%, of the United States’ financial assets, and that number is expected to grow to $30 trillion by 2030.
• Life expectancy is a major factor to consider. The median life expectancy for women is 85 years, while the life expectancy for men is 81.6 years. This means women need to plan for longer in retirement, underscoring the importance of investing to ensure a comfortable and financially stable future.
• Only 48% of female respondents to the FINRA survey report having an emergency fund with three months of living expenses set aside, compared to 58% of male respondents.
• Women shouldn’t be afraid to invest. Women investors get better investing returns than men, with studies finding differences of 0.4% to almost 1%.
• The stats speak for themselves: Women investors are less impulsive investors than men. They’re more likely to remain calm during market volatility and can take a more passive approach to their investments, which pays off. A recent survey showed that only 8% of women liquidate their accounts during market downturns, compared to 15% of men. Women log on to their accounts 40% less frequently than male investors do, and women trade 45% less frequently.

Women can continue to declare financial independence by increasing their roles in the investment world. By committing more of their earned income to investments — and diving into the investment world armed with knowledge — women have the potential to achieve their financial destiny. If you have any questions about how to increase your commitment to investing, reach out to a member of our team.

Stats sourced from Women and Investing in 2023: Where Women Win from The Motley Fool.