Do Female Investors Outperform the Male Investors?


Do Female Investors Outperform the Male Investors?


According to Fidelity Investments' 2021 Women and Investment Study, despite many women's lack of investing confidence, their portfolios beat their male counterparts.

According to a review of annual performance across 5.2 million accounts from January 2011 to December 2020, women investors earn positive returns on average and outperform males by 40 basis points, or 0.4 per cent.

Lorna Kapusta, head of women investors and client engagement at Fidelity, said, "It illustrates that women are wonderful investors, and when they take action, it can pay out rather nicely for them."

The latest findings back with a previous study from the company, which found that women can outperform males with a buy-and-hold investing strategy rather than frequent trading, which can stifle performance over time.

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The data demonstrate that women have made progress beyond retirement accounts, with two-thirds now investing extra savings outside of emergency needs, up 50% since 2018.

With women's salaries rising, the trend to invest outside of retirement began in 2018, according to Kapusta. The epidemic, on the other hand, may have accelerated some of these changes.

While the recession presented many women with unprecedented financial hardships, it also provided drive.

Since last summer, there has been a 43 percent year-over-year increase in women opening new Fidelity investing accounts, as well as a 37 percent increase in women seeking advice, according to Kapusta.

"All of these variables, taken together, really laid the groundwork for this type of critical transformation," she continued.

Furthermore, the data suggest that 9 out of 10 women are ready to take proactive steps over the next 12 months, with 62 percent willing to improve their knowledge of financial planning and investing.

Room to grow

Despite the fact that women have progressed, just one-third of them are confident in their abilities to make economic judgments.

Worse, many people have too much cash outside of their emergency fund and may be missing out on growth opportunities.

"We're still seeing money on the sidelines," said Kapusta.

Indeed, nearly half of women said they have at least $20,000 in savings on top of their emergency funds, and a sizable percentage have cash in excess of $50,000 or $100,000.

Women want to take a more active role in their finances, but investing myths may be holding them back. According to the research, 70% of women say they need to learn more about picking individual stocks.

She explained, "There's often this self-doubt that comes into play." "And we have the ability to keep normalizing the money topic."

The findings from a countrywide poll of 2,400 participants, evenly split between men and women, were included in Fidelity Investments' 2021 Women and Investing Study. Investors had to be at least 21 years old, earn $50,000 or more, and participate in a company retirement plan.

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