Women are amazing investors

Women have a track record of achieving higher investment returns, reacting less impulsively to market volatility, and saving more diligently than men.¹ This could be helpful since women also face significant challenges when it comes to saving for retirement – specifically, they tend to earn less, live longer, and question their investing abilities more than men.¹ Here’s a quick survey of what the data says about women and investing.

Higher returns

In 2021, Fidelity looked at the performance of more than five million U.S. clients over 10 years and found women’s returns were 0.4% higher.  That study confirmed a 2018 Warwick Business School study of 2,800 U.K. investors over three years in which women outperformed men by 1.8%.² 

Less panic

One reason for those higher returns is that women are cooler under pressure, trading less frequently than men.³ A 2020 Vanguard study found women were 34% less likely to trade than men.  Similarly, a 2019 Wells Fargo study found single women were 27% less likely to trade than single men.⁴

More saving

Another Fidelity study, conducted in 2017, found women consistently set aside 9.0% of their pay in workplace plans, compared to 8.6% among men. Outside workplace plans, women topped up their account balances by 12.4% versus 11.6% among men.⁵

Lower salaries

Higher saving rates are especially impressive given that women who work either full-time or part-time earn 89 cents for every dollar men earn. The difference is even more stark for racialized women, who make 59 cents for every dollar white men earn.⁶  

Greater longevity

Women can expect to live four years longer than men⁷  – yet the salary gap contributes to women retiring with 30% less in savings according to a 2021 Mercer Canada report.⁸  Making the most of every dollar can drive good money habits.

Lower confidence

However, women report being less comfortable making investment decisions than men – 34% versus 49% in a 2020 study.⁹  In honour of International Women’s Day on March 8, we want to recognize women’s skilled investing behaviour, which deserves much more credit than it gets.

Advice adds value

Working with a professional advisor can amplify your investing abilities and confidence. Three studies by the CIRANO Institute all confirmed Canadians who worked with a financial advisor ended up with significantly more assets than those who didn’t: 2.7 times more in 2010, 3.9 times more in 2014 and 2.3 times more in 2018.¹⁰

Bottom line

An advisor can help you determine your priorities, set realistic goals and remain confident in your plan, reinforcing good instincts and helping you achieve financial security. Contact your Edward Jones advisor to get started or to make sure your plan reflects your current, personal situation.