What We Can Learn from Women Investors - Moomoo

Women control more wealth than ever before. With different financial attitudes and needs, women are transforming the investment landscape. As they align their investments to reflect their financial goals and values, women investors push traditional investment strategies in a new direction.

 

Women in the World of Investing

As women take on greater financial responsibility at home, there is a greater focus on building wealth. A recent study found that 67% of women invested outside their retirement accounts in 2021. This trend is remarkable, considering that 44% of women reported investing outside their retirement savings in 2018.

The trend of women investors shows no sign of slowing. Today, American women control $11 trillion in assets. By 2030, American women will control $30 trillion in assets.

 

12 Things We Can Learn from Women Investors

The way men and women invest their money can be drastically different. Men may focus on short-term gains and performance, while women tend to align their investments with their long-term goals. While women may be more passive when investing their money, they often generate higher returns than men.

Develop and Stick to a Financial Plan

Women investors are likelier to develop and stick to a financial plan as part of their overall investment strategy. A financial plan provides the roadmap to reach financial goals. A sound investment plan helps you stay on track with your financial goals and can potentially help you make better decisions during market downturns.

Set Goals 

Women can potentially help you make better decisions with their long-term goals in mind. Rather than trying to outperform the market, women often tailor their investment strategies toward securing their family's future. By setting long-term goals, such as investing in a child's education or retirement, women are more likely to reach their financial goals.

More Risk-Averse

Women tend to stay focused on building long-term, low-risk investment portfolios. As such, women investors are typically less influenced by market trends and lean toward more passive investments, such as exchange-traded funds (ETFs) or index funds, is a type of mutual fund or exchange-traded fund that seeks to track the returns of a market index.

Taking on less risk does not necessarily mean lower performance. Instead, studies show women investors generally achieved similar returns as male investors despite taking on less investment risk.

Think Long Term

Women are less likely to make investment decisions based on market conditions and performance. Instead, women investors tend to choose investments consistent with their long-term life goals and values. A woman may invest in an ETF or mutual fund that may be less volatile when compared to individual stocks.

Disciplined

Women tend to invest based on the goals laid out in their financial plans. Rather than dropping money into the latest cryptocurrency deal, many women explore opportunities before investing.

Women investors tend to pick investments consistent with their financial goals and stay in them longer. As disciplined investors, women are less likely to deviate from their financial plans because of market fluctuations.

More Patient 

Women tend to stick with a steady investment approach instead of reacting to big market wins and losses. While you may not see double-digit growth in your portfolio in the short term, patiently sticking to your financial plan can help you build wealth over time. 

Trade Sparingly

Women typically invest based on their long-term goals. As such, women investors tend to hold onto their investments and make fewer trades. You pay fewer transaction fees, and holding onto your investments gives them the opportunity to grow,, though the opposite can also happen.

Prefer a More Diversified Portfolio

Women tend to prefer diversification when building their portfolios. Rather than leaning heavily toward stocks or bonds or investing in a specific market sector, a diversified portfolio can hold several financial instruments across many industries. A diversified portfolio can help minimize risk.

Inclined Toward Businesses with a Social Mission or Female-Run

Women tend to look past the numbers and invest in the big picture. Women tend to invest their money in companies with a social mission they agree with. Women may be more likely to support women-owned companies by investing in them.

Inquisitive by Nature

Studies reveal that women are typically less confident with their investment knowledge than their male counterparts. Yet despite this lack of confidence, women are often more open to seeking outside help when deciding how to invest their money. Women investors may be more likely to search for the answer online or engage a financial adviser for assistance.

Consider Own Longevity as an Asset

Women can live an average of five years longer than men. Women generally have more time to invest, and their money has more time to potentially grow. Women can use this extra time to their advantage, especially if they start investing early.

Work with a Financial Adviser 

While women tend to rely on their own research when making investment decisions, they are often willing to ask for help. A financial adviser provides expertise in goal setting and wealth management. Being open to learning from a financial adviser can place women in a stronger position to invest.

 

Women Are Shaping the Investment Landscape

Women continue to redefine investment habits. A woman investor tends to have less tolerance for risk and is willing to take the time to investigate before investing. Women investors stay focused on their goals and often invest in companies with a mission they agree with.

 

Frequently Asked Questions

Why do women tend to be patient investors?

Women tend to be patient investors because they generally hold onto their investments and conduct fewer trades.

Are female investors better than male investors?

Female investors often realize better returns than male investors. Females typically hold their investments long term, while males usually buy and sell their holdings.  There are several other possible reasons for this. Many of them have been listed earlier in this article

How does gender affect investment behavior?

Gender can affect investment behavior. Male investors tend to be more confident investing money and taking on risks. Women investors tend to feel less secure and often choose lower-risk investments.