Women are taking centre stage in a new and more democratic age of investment. From the very top of the financial markets right down to family investing, women have stepped up.
At household level, female investors are sharing knowledge and sometimes grouping to spread investment risk as they take increasingly confident steps to buy and trade assets.
What has really changed of late?
For too long the investment space has been dominated by male investors, but I believe the next decade will define a new age of female investor power. This has partly been driven in the US by investment democratization through the crowdfunding boom and growth in the private securities market, and by a post-pandemic re-appraisal of household finances.
There were pre-pandemic signs because the JOBS Act, having gone live in the US in 2016, had really enabled crowdfunding to hit its stride by then, but hardly a month goes by now without statistics showing how women are the new big investor power.
And the pandemic is surely a factor; a Fidelity Investments survey recently revealed that 50% of women are more interested in investing since it started and, significantly, 42% have more to invest since COVID-19 hit. Fidelity’s survey also predicted that 2022 would be the year that 90% of women it interviewed were ready to take proactive investment steps.
A high percentage of respondents were thinking about how to execute that investment desire: 62% wanted to boost their investment knowledge for high returns; 52% wanted to create a financial plan; 44% planned to reach out to a financial professional to help them take action; and 42% planned to be more proactive by investing more of their savings
The study also found 67% of women are now investing outside of their retirement accounts – up 50% on 2018 – and it pleased me to note that portfolios held by women have been outperforming those of male counterparts by an average of 0.4%.
What is the difference in approach?
Where there is a clear difference between the two sexes is their approach to investment: men are driven simply to outperform the stock market, women see this as secondary to a long-term goal like financing a child through education, long-term healthcare or retirement.
And they have been quick to see the opportunities offered by the JOBS Act, through crowdfunding for many exciting start-ups – the new environment that inspired myself and several other seasoned Wall Street professionals to form Rialto Markets in 2016.