Women & Investing: The Road Ahead

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Published by Taylor Financial Group for Women

The role of a woman has certainly expanded over time, especially in the area of finance. Indeed, one of the most pressing discussions being had in today’s financial world is the impact that a woman investor will have moving forward.  

According to Investment News, women in America are projected to control approximately $22 trillion of wealth by the year 2020, indicating that there is a massive wealth transfer happening. In much simpler terms, 90% of women are expected to control their family’s wealth. And, interestingly enough, according to Fidelity, women are actually making better investment decisions than men.

Fidelity recently published a Study, which looked at the investment habits of men and women.  Their findings showed that women outperformed men in investment performance by .4% last year.  Although this is not a huge difference, a recurring trend of outperformance will most certainly be significant over time.  Furthermore, Fidelity’s Study showed that women tended to subscribe to a long-term buy and hold strategy more often than men, which could explain the higher investment returns.  They were also much less likely to perform trades and traded less frequently than men.

Another significant finding of the Study showed that women were dedicating more of their salary towards their retirement accounts than men.  On average, women saved 9% of their annual salary as compared to their male counterparts, who saved 8.6%.  Although this figure is also not significantly different, it does continue to point to a trend of women making more practical investment decisions.

Possibly, the most critical point outlined in the Fidelity study was the fact that, although women are making smart investment decisions, only 9% of the women who participated in the Study believed that they outperformed men last year.  Additionally, Fidelity stated that within the U.S., more than 90% of professional women wanted to get a better understanding of financial planning.  So, even though the Study suggests that women are already making smarter financial decisions, their confidence in their ability to manage financial situations still remains low.  It is clear that better education and feeling more prepared and empowered will be a key to helping women transition into the anticipated sizable wealth transfer ahead.  They are already making great decisions, they just need to feel confident enough to acknowledge that!

For those of you who want to learn more about financial planning and become more empowered, you can visit the Taylor Financial Group website to find many helpful resources.  In addition to constantly publishing content on our website, we also host workshops at local libraries to help women become more confident at managing their wealth.

 

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