Women Who Invest With Confidence

By Lynn Anderson, CFP® & Katherine K. Burgess, CFP® | Jun 06, 2024 |

Women exhibit remarkable emotional resilience and composure in the face of market fluctuations. Yet, many new female Brighton Jones clients come to us doubting their ability to invest with confidence.  

Still, the data suggests this perceived shortfall isn’t based on reality. Women’s lower trade rates indicate a patient and measured investment approach. Data compiled by Vanguard showed that when comparing 37,000 investor households, men traded their accounts 45% more than their female counterparts, with single men trading 67% more than single women. According to a Fidelity study, this excessive trading and overactivity leads male investors to underperform women by 40 basis points annually.  

These factors collectively highlight female investors’ skills, showcasing their adeptness at maximizing returns and minimizing risks in their portfolios. Rather than being too stock-heavy in equity, a woman’s portfolio is more likely to contain a mix of cash, bonds, and stocks that balance return potential and risk. This diversification strategy shields against volatility and positions women’s investments for more robust growth.  

Persistent lack of confidence

The lower confidence levels that women often grapple with in investing can be attributed to a confluence of factors. Women may perceive themselves as less informed about investment intricacies, leading to self-doubt and hesitation. A study in 2021 by the Global Financial Literacy Excellence Center found that women were disproportionately more likely to answer a financial literacy question with “do not know”; however, when that answer option was removed, women often chose the correct answer. This suggests their inclination to answer “do not know” stems from a perception of lesser financial understanding than men.  

Another financial area that can sap women’s confidence is in relationships with men. While women and men have nearly equal influence on day-to-day financial decisions, only 46% of women feel they have influence when it comes to investment decisions. This lack of perceived control can manifest as a lack of ownership and inclusion in investment choices. Some women, perhaps recently divorced or with children flying the nest, are reorientating their lives and focusing on themselves—which can be both liberating and overwhelming. Many new female Brighton Jones clients are looking for a thought partner when starting over and doing things on their own financially.  

The value of Women Living a Richer Life (WLRL) to you

Engaging in frequent financial conversations with peers can foster a supportive environment for sharing insights, experiences, and concerns and building confidence in investing and other areas of wealth management. These conversations offer opportunities to learn from diverse perspectives, enhance decision-making skills, and dispel doubts. The community that grows through Women Living a Richer Life programming and events is a great way to meet other women and build confidence in investing. 

How Brighton Jones can help

Brighton Jones is one of the country’s fastest-growing wealth management firms, with over $24 billion in assets under advisement, helping more than 4,000 clients live a richer life daily. Their advisors have intimate knowledge of corporate benefits at America’s largest companies. They are proud to help their clients navigate the trickiest components of their benefit offerings, whether minimizing tax liabilities, cash flow management, or planning around their equity compensation. 

Acknowledgment: Michelle Murdter and Evelyn Westby supported the research and drafting of this blog.

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