Although many women lack investing confidence, their portfolios still outperform their male counterparts, according to Fidelity Investments’ 2021 Women and Investing Study.
On average, women investors achieve positive returns and surpass men by 40 basis points, or 0.4%, an analysis of annual performance across 5.2 million accounts from January 2011 to December 2020 shows.
See Why Women Investors Are Still Outperforming Men
However, the pandemic may have sped up some of these shifts. While the crisis caused unprecedented financial challenges for many women, it also sparked motivation.There has been a 43% year-over-year increase in women opening new Fidelity investment accounts since last summer, and a 37% uptick in women reaching out for guidance over the past two years, Kapusta said.
“All of these factors together really provided the right foundation for this type of necessary change,” she added.Moreover, 9 in 10 women are ready to take proactive steps over the next 12 months, the findings show, with 62% eager to boost their knowledge of financial planning and investing.
Room to grow
While the findings show women have made progress, only one-third feel confident in their ability to make investment decisions.What’s worse, many have too much cash outside of their emergency fund and could be missing out on potential growth.“We’re still seeing money sitting on the sidelines,” Kapusta said.
Indeed, nearly half of women reported keeping $20,000 or more in savings on top of emergency reserves, and significant percentages are holding cash in excess of $50,000 or $100,000.Women want a more active approach, but misconceptions about investing may be holding them back. For example, the study reported that 70% of women believe they need to know more about picking individual stocks.
“There’s often this self-doubt that comes into play,” she said. “And the opportunity for us is to continue to normalize the money conversation.”Fidelity Investments’ 2021 Women and Investing Study includes findings from a July nationwide survey of 2,400 adults, split evenly between men and women. The investors were at least 21 years old, earning $50,000 or more, and contributing to a workplace retirement plan.