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Women Investors are Ahead of the Game

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Wednesday, June 22, 2022

Wealth and income disparity between men and women in America is still a real concern with the gender pay gap and other factors affecting women and their finances.  For every dollar that U.S. men make on average, women make less. In fact, according to Pew Research, women earn 84 percent of what men earn. Based on this estimate, it would take an extra 42 days of work for women to earn what men did.

When you take race into account, the gap widens. Also, single women are more likely than single men to have the financial burden of custodial parenthood and a lot of women enjoy less wealth-building fringe benefits (such as employer-sponsored retirement plans) because women are more likely to work part-time and such benefits are often denied to part-time workers. Add to that the fact that women live longer than men on average, putting strain on women’s retirement funds.

Adversity is the mother of invention — or so the saying goes. And let’s be honest, women have faced (and continue to face) more than their share of adversity. So being smart and inventive with your money doesn’t seem out of character when it comes to the fairer sex. It isn’t always how much you earn, but rather how intelligently you use the money that you do earn. There are some notable differences between the genders (in favor of women) when it comes to trading and investing.

Women tend to tolerate lower financial risk than men and make smarter, more calculated decisions about their investments. What’s more, women tend to be less competitive than men, especially in areas where risk and potential loss are at stake.

An analysis of annual performance across 5.2 million accounts from January 2011 to December 2020 shows that on average, women investors achieve positive returns and surpass men by 40 basis points, or 0.4 percent.

Several studies back up the claim that women investing in stocks are outperforming their male counterparts. Why is that? Reports show women investors' tendencies to engage in less trading than men and hold stocks over a longer period of time. And with women making the majority of household purchases, you can see a picture that adds up to the trend of a female-driven economy.

With earnings increasing for women, there are more and more investments being made outside of retirement, but the pandemic may have sped up some of these shifts. While the crisis caused massive financial challenges for many people, it may have also sparked motivation — especially in women.

This motivation, combined with an eagerness to learn more about investments and financial planning could be the recipe that ignites a new generation of financially savvy and powerful women driving a growing economy.

 

 

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC

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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Lawrenceville, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 800-367-3000 Visit our website: www.davidlerner.com

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