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Are Women Better Investors?

By Laura Neal , CFP® , Wealth Advisor 

 When I began my financial planning degree program in 1996, it really didn’t occur to me that I was entering a male-dominated profession.  My mother had always been the leader in financial decision-making in our family, which didn’t seem unusual to me at all.  Through her, I learned the value of a dollar and the value of giving back.  

Almost three decades later, it is now the norm for women to direct their own as well as their family’s finances.  In fact, two separate studies show that women’s investment returns were .4%1 to 1%2 higher annually than their male counterparts.  They suggest the main reasons for women outperforming men with regard to investment returns boil down to “overconfidence” and “overactivity.”2

Here are a few of our observations as to why women are naturally good financial decision-makers:

  • Women seem inclined to ask for help in areas in which they lack expertise and, therefore, seek out financial advisors at a higher rate than men. Women tend to ask for directions (or at least they did in the days before Google Maps and Waze) more than men.  Men tend to be more confident in their own decision-making and ask for help (and directions) less often. Hence, the overconfidence issue. 
  • Women tend to carry comparatively higher emotional intelligence, which makes them natural collaborators in the financial planning process and allows them to envision their goals more meaningfully. 
  • Female investors generally prefer to get educated, create a plan, and stick to it, regardless of market or financial fluctuations.  Think about an investment portfolio like a bar of soap; the more you touch it, the less you have.  Studies show that the more you trade or attempt to time the market, the worse your results are.  This is where overactivity can be a problem. 
  • Female investors tend to be very careful and deliberate about choosing an advisor to work with and then put a lot of trust in that relationship when they do. This long-term continuity with an advisory team or advisory firm leads to better long-term outcomes – especially since investment strategies tend to play out over decades, not months and years.

Fortunately, you can choose to put these observations to use in your financial life, regardless of your gender!

We at Woodward Financial Advisors have the privilege of working with men and women who each bring their own strengths to the planning process – some align closely with these studies and observations, and some certainly don’t.  What seems always to be true is that our clients experience the best outcomes when all parties actively participate in financial matters.  While I manage my family’s budget and investments, I sit down with my husband regularly to review our cash flow and net worth. I appreciate that Woodward Financial Advisors has a wide variety of different clients, of which many are part of the increasing number of female financial decision-makers out there. As we say to many of our clients, what’s most important to remember is that financial planning is for everyone in your household, no matter who’s running the financial show.


  1. Fidelity Investments, “2021 Women and Investing Study” (https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/aboutfidelity/FidelityInvestmentsWomen&InvestingStudy2021.pdf), 2.
  2. Barber, Brad and Odean, Terrance, “Boys Will Be Boys: Gener, Overconfidence, and Common Stock Investments” (The Quarterly Journal of Economics February 2001), 262.

Image credit: iStock photo

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