A growing number of women are increasing their investing prowess and financial education, research shows. The ladies are stepping it up. I love this kind of news.
I admit I am a sucker for a study that shines the light on women and money in a positive way. And the key findings from Fidelity Investments “2021 Women and Investing Study” do just that.
I know, I just did this happy dance with the MIT “Freak Out” report, but more to enjoy here.
The bold headline: two-thirds (67%) of women are now investing savings they have outside of retirement accounts and emergency funds in the stock market, which represents a 50% increase from 2018, according to the research. What’s more, 52% are planning to create a financial plan to help them reach their goals within the next year.
This is noteworthy since women typically get the bad rap of being nervous and cautious investors, who probably would find investing in stocks uncomfortable. Women are also notorious for saying financial planning is boring, or they aren’t good with numbers. Neither which is true, but an excuse for not understanding investing terminology perhaps and being intimidated by the seemingly macho world of Wall Street.
Where are they putting those extra savings funds besides individual stocks and bonds? The study found that women also socked money away in mutual funds and ETFs (63%) and money-market funds or CDs (50%): ESG/sustainable investments (24%) and get this: 23% in cryptocurrencies. I had to look at that last statistic twice, but that’s what the report says.
The age brackets by generation for those investing outside of retirement account–a whopping 71% of female millennials—ages 25 to 40; 67% of Generation X—ages 41 to 56 and 62% of boomer women ages 57 to 75. All good numbers.
But as anyone who has been reading my column knows, this is the nugget that made a smile spread across my face: When women do invest, they see results: new scrutiny of more than 5 million Fidelity customers over the last 10 years finds that, on average, women outperformed their male counterparts by 40 basis points, or 0.4%. That’s not a heap mind you, but a win is a win.
I’ll take it.
“Over the last few years, we were already seeing an increasing number of women investing outside of retirement to grow their savings, but the pandemic really lit a fire under that momentum,” Kathleen Murphy, president of Personal Investing at Fidelity Investments, told me.
“It’s driven many to reflect and re-prioritize what’s most important and focus on making greater progress toward those goals. We’re seeing that motivation in the record numbers of women reaching out for financial planning help and opening new brokerage accounts, as well as advisory accounts.”
The data was drawn from a nationwide survey of 2,400 American adults (1,200 women and 1,200 men). All respondents were 21 years of age or older, had a personal income of at least $50,000 and were actively contributing to a workplace retirement savings plan, like a 401(k) or 403b. This survey was conducted in July 2021 by CMI Research, an independent research firm.
The overall findings are certainly promising.
Yet when you get into the weeds you find that only a third of women canvassed see themselves as investors, according to the study. Only 42% feel confident in their ability to save for retirement and a mere 33% say they feel confident in their ability to make investment decisions.
Most women (64%) say they would like to be “more active in their financial life, including making investing decisions,” but 70% believe they would have to learn about “picking individual stocks” to get started.
I like that awareness of the need to get educated. (One of my favorite authors for this topic is Jonathan Clements, the founder and editor of HumbleDollar and the author of many personal finance books, including From Here to Financial Happiness and How to Think About Money.)
As Fidelity’s Murphy mentioned: Half of the women say they are more interested in investing than they were at the start of the pandemic and want to learn more — not just about how to start investing — but how to evaluate and select different types of investments to align with specific goals, and how to manage an existing portfolio to ensure they are on track.
These findings are in step with what Catherine Collinson, chief executive and president of the nonprofit Transamerica Institute and Transamerica Center for Retirement Studies told me when I interviewed her for this column: What’s Behind the Surprising Gender Split for Boomers’ Retirement Saving?
Her firm also found that “early indicators are that the pandemic has prompted both men and women to engage in their finances and pore over their financial situation to a degree that they may not have previously.”
Finally, here’s the nagging fear many of us (me too) can relate to: 32% of women say not earning enough money keeps them up at night, according to the research. For 37%, it’s managing debt that’s their night sweat. And more than half of women say it’s worries about long-term finances that has them tossing and turning.
Age is an indicator of whether money woes keep us up at night, but not the way you might expect, or at least what I did. Overall, it’s the millennial women who are the most troubled when the light goes out: 77% say finances have kept them up at night as compared to 73% of Generation X and 59% of boomers.
Here’s to sweeter dreams ahead.
By: Kerry Hannon
Kerry Hannon is a leading expert and strategist on work and jobs, entrepreneurship, personal finance and retirement. Kerry is the author of more than a dozen books, including “Never Too Old to Get Rich,” “Great Jobs for Everyone 50+,” and “Great Pajama Jobs: Your Complete Guide to Working From Home.” Follow her on Twitter @kerryhannon.
- “Women and Leadership”. Pew Research Center. Retrieved 22 October 2015.
- Marks, Gene. “Why Most Women Will Never Become CEO”. Forbes. Retrieved 22 October 2015.
- White, David. “Gender Roles in 1950s America”. Study.com. Retrieved 22 October 2015.
- Eswaran, Mukesh. “Why We Think the Way We Do about Men, Women and Work”. PBS. Retrieved 22 October 2015.
- “It’s The No. 1 Country For Women In Politics — But Not In Daily Life”. NPR.org. Retrieved 2019-12-03.
- AfricaNews (2017-07-10). “Rwanda tops UN list of countries with most women in parliament”. Africanews. Retrieved 2019-12-03.
- Tripp, Aili Mari. “Women and Politics in Africa Today | Democracy in Africa”. Retrieved 2019-12-03.
- lars. “Women tighten grip on power in Norway – bottom place for Finland — Nordic Labour Journal”.Goldberg, Naomi Josephine. “Women’s Suffrage in Saudi Arabia”.
- “It’s Time To Give The Spice Girls The Credit They Deserve”. The Huffington Post. August 6, 2015. Retrieved February 15, 2017.
- “The Spice Girls were my gateway drug to feminism”. The Guardian. 13 December 2012. Retrieved December 13, 2012.
- Will there ever be another girl band like the Spice Girls?. New Statesman. 14 July 2016.
- BBC News. Article on “Girl Power” being added to the Oxford English Dictionary. British Broadcasting Corporation. 17 January 2002.
- Dawson, Ryan. “Beatlemania and Girl Power: An Anatomy of Fame”. Bigger Than Jesus: Essays On Popular Music. University of Cambridge. Archived from original on 28 April 2005. Retrieved 17 February 2017.
- “The Millennial 100: #2.The Spice Girls’ ‘Girl Power‘“. Rolling Stone. October 17, 2018. Retrieved February 2, 2021.
- Costi, Angela (October 4, 2002). “Super Slick Power Chicks: The New Force or Elaborate Parody?”. Senses of Cinema. Retrieved 2012-09-30.
- “The Third Wave’s Final girl: Buffy the Vampire Slayer” Archived June 20, 2005, at the Wayback Machine
- Karlyn, Kathleen Rowe (2003). “Scream, Popular Culture, and Feminism’s Third Wave: I’m Not My Mother”. Genders. Archived from the original on 2012-06-12. Retrieved 2012-09-30.
- Karras, Irene (2002). “The Third Wave’s Final Girl: Buffy the Vampire Slayer”. Thirdspace: A Journal of Feminist Theory & Culture. 1 (2). ISSN 1499-8513.
- Riley, Robin (May 2004). “Review of Early, Frances; Kennedy, Kathleen, eds., Athena’s Daughters: Television’s New Women Warriors”. H-Net Reviews. Archived from the original on 2007-06-10. Retrieved 2012-09-30.
- “OED:Girl power”. Oxford English Dictionary. Retrieved 2012-09-30.
- E y e s <-> <-> O n l y Archived 2008-01-05 at the Wayback Machine
- Ging, Debbie. “Girl Power” doesn’t empower: why it’s time for an honest debate about the sexualisation of children in Ireland July 2007.
-  Archived January 31, 2008, at the Wayback Machine
- Lamb, Sharon; Brown, Lyn Mikel (2007). Packaging Girlhood: rescuing our daughters from marketers’ schemes. New York: St. Martin’s Griffin. ISBN 9780312370053.