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Survey: Less Than Half of Women in U.S. Invest in the Stock Market

Women are likely to reside longer and earn lower than males, growing their have to put cash away for the future. Saving towards a long-term aim is nice, however investing could make your cash develop over time. And whereas greater than half of Americans (56%) say they at present make investments in the inventory market, that is solely true for 48% of ladies, in comparison with 66% of males, in accordance with a brand new NerdWallet survey.

In the NerdWallet survey of greater than 2,000 U.S. adults — amongst whom 1,004 at present make investments in the inventory market and are known as “investors” all through — performed on-line by The Harris Poll, we requested women and men how they discovered about investing and what feelings come up when they consider investing. We additionally examined perceived benefits and drawbacks that girls have in comparison with males in terms of investing for the long run.

Key findings

  • Women usually tend to delegate the administration of their portfolio: About two-thirds of ladies buyers (66%) say another person manages not less than some of their investments in the inventory market, in comparison with simply over half of males buyers (55%).

  • Women are much less seemingly than males to have discovered about investments: According to the survey, 69% of ladies say they’ve discovered how to decide on investments, in comparison with 83% of males.

  • Anxiety, confusion are extra prevalent feelings in ladies than males when serious about investing: The survey reveals that girls are extra seemingly than males to say they really feel anxious (29% vs. 22%) or confused (23% vs. 17%) when serious about investing. On the flip facet, males are more likely than ladies to report feeling assured (41% vs. 22%).

  • Americans imagine ladies have each disadvantages and benefits over males in terms of long-term investing: Half of Americans (50%) imagine that girls have disadvantages in comparison with males when investing long run, however about the similar quantity (52%) imagine ladies have investing benefits over males.

Women are much less more likely to handle their very own investments

Three in 5 buyers (60%) say another person manages their investments, however that is extra widespread amongst ladies than males, in accordance with the survey. Two-thirds of ladies buyers (66%) say another person manages their investments, in comparison with 55% of males who make investments.

Because some buyers might have a number of funding accounts — say a 401(ok) and IRA — there could possibly be overlap in those that say another person manages their investments and those that say they handle their very own investments. According to the survey, 58% of buyers handle their very own investments, with ladies much less more likely to say this than males (51% vs. 64%).

We additionally requested Americans with and with out monetary advisors in the event that they care about the gender of an advisor. According to the survey, 60% of Americans don’t have a monetary advisor and 40% do. Most of these with an advisor (68%) had no choice about the gender of their advisor. But millennials (ages 25-40) with advisors are extra seemingly than Gen Xers (ages 41-56) or child boomers (ages 57-75) with monetary advisors to have particularly chosen a feminine advisor (39%, vs. 17% and 5%).

What you are able to do: Not everybody needs or wants a monetary advisor, however if you happen to’re , there are completely different choices primarily based in your life stage and finances. A robo-advisor makes use of pc algorithms to handle your investments primarily based in your danger tolerance and the way a lot time it’s a must to make investments. Costs are sometimes low and you can begin with a small quantity of cash.

On the different hand, human monetary advisors — whom you meet with both on-line or in particular person — are costlier and will require extra money to get began, however many present full-service monetary planning, which can be helpful in case you have a fancy cash state of affairs. If you go this route, you can begin interviewing potential planners with these 10 inquiries to ask monetary advisors.

“It’s essential to discover a respected and educated advisor who you may belief and can take care of your greatest curiosity,” says Tiffany Lam-Balfour, an investing and retirement specialist at NerdWallet. “Working with an advisor means you’ll be sharing your personal financial situation and life goals, so you need to feel comfortable. Interviewing several prospective advisors can help you figure out which one fits best with you.”

About 7 in 10 women learned how to choose investments

Three-quarters of Americans (75%) say they’ve learned how to choose investments, but there’s a gender gap here as well. More than 4 in 5 men (83%) say they’ve learned about investments, compared to 69% of women. Some in the know are self-taught, while others learned from a financial advisor, spouse or teacher.

Those with higher household incomes are more likely to have learned how to choose investments than those making less. More than 9 in 10 Americans with a household income of $100,000 or more (91%) say they learned about investments, compared to just 59% of those with a household income below $50,000.

The youngest generation of adults — Generation Z (ages 18-24) — are more likely than their older counterparts to say they learned how to choose investments from their parents (32%, compared to 19% of millennials, 12% of Xers and 10% of baby boomers). This may indicate that the subject of money is becoming less taboo in the home and younger Americans are learning the importance of investing for the long term earlier than other generations.

What you can do: Most toddlers probably don’t need to know how to build an investment portfolio, but teaching children about money — and yes, investing — early can help them build healthy financial habits and give them a good foundation for managing their own money when it’s time to do so. Knowing about the learning disparities that exist can help people be mindful about not unintentionally doling out those financial lessons unevenly based on gender.

“Often girls are taught more about budgeting whereas boys are taught more about investing. Making sure to expose girls to the same financial topics as boys can help put girls on a more level playing field,” Lam-Balfour says. “There are many ways to help children learn about investing. Playing family games such as Monopoly or Life can lead to financial discussions in a fun way. Creating a mock investment portfolio can teach about the market without the risk of losing money.”

Women tend to be less confident, more anxious than men about investing

Emotions around money and investing can be fraught, and the survey found differences in how men and women feel when thinking about investing. While men are more likely to feel confident than women (41% vs. 22%), women are more likely to say they feel anxious than men (29% vs. 22%).

What you can do: Building confidence around investing may take some time, but with the right resources, it doesn’t have to be a difficult or time-consuming endeavor. The earlier you learn how to start investing, the more time your money has to grow.

“It’s easy to put off something when you feel less confident or anxious, but with investing, time really is money,” Lam-Balfour says. “And there are plenty of ways to get started, as well as people and places to turn to for help so it’s not all just on you.”

Free financial advice is abundant, and it should be approached with a dose of healthy skepticism — not every investing TikTok is a winner. But legitimate resources, like money tools and educational content from your bank or broker, can help you learn more about investing and reach your goals.

Americans perceive investing advantages, disadvantages for women

There are systemic issues working against women that could impact their ability to invest, including the gender wage gap and potential career interruptions associated with caregiving responsibilities. Yet only half of Americans (50%) believe women have disadvantages compared to men when investing for the long term, while another third (33%) don’t think there are disadvantages and the remaining 17% aren’t sure.

Men and women mostly answered this question the same, although when it comes to women earning less and therefore having less to invest, 28% of women see this as a disadvantage, compared to just 18% of men.

On the other hand, more than half of Americans (52%) identified advantages that women have over men when it comes to long-term investing. For example, 22% of Americans say women are more likely to listen to investing advice than men, and the same proportion (22%) say women are less likely to make risky investments than men.

What you can do: Women may have certain advantages when it comes to investing, but the disadvantages often outweigh those, and have been amplified for many women by the pandemic. In fact, according to an analysis for Newsweek, leaving the workforce — whether due to a layoff or lack of child care or in-person school due to COVID — could cost women hundreds of thousands of dollars over their lifetimes in lost wages, wage growth and retirement benefits.

Depending on your situation, investing as much as you did pre-pandemic may be impossible. That said, if you can put anything aside consistently instead of opting out of investing, it’s a good idea to do so. For those not currently in the workforce who are married, a spousal IRA allows you to save for retirement even if your spouse is the only one with earned income, as long as you file taxes jointly. Regardless of your marital status, if you share finances with someone, you can also contribute to a taxable brokerage account in your own name.

If you haven’t been financially impacted by the pandemic, but haven’t begun to invest due to risk aversion or lack of investing knowledge, the best thing you can do is just start. While ideally you want to choose low-cost, well-diversified investments — particularly for your retirement fund — you don’t need to know everything before you begin. Check out our guide on investments for beginners to help you get started. Ultimately, the best thing you can give your investments is time to grow, so the earlier you begin, the better.

“There are ways to start investing that can make it less daunting — investing platforms with low or no account minimums, automating contributions or hiring professional management at low cost,” says Lam-Balfour. “And remember, nothing is set in stone. You can always transfer your account or find a new advisor if something isn’t working right for you.”

Methodology

This survey was conducted online within the United States by The Harris Poll on behalf of NerdWallet from July 26-28, 2021, among 2,074 adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact Chloe Wallach at [email protected].

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