Women and investing: How to build financial intelligence

Only a quarter of women in the U.S. invest in the stock market.¹

That said, when women do invest, their portfolios tend to outperform men’s. In fact, studies over the past two decades show that, generally, women investors make less risky investments, hold investments longer and see higher returns.²

What percentage of women invest?

One reason women are less likely to invest than men may be that they see the stock market as too risky. According to U.S. Bank’s 2020 Women and Wealth Insights Study, a majority (72%) of women say financial security is a main motivator for building wealth, compared with 59% of men.³

Statistics indicate that when it comes to financial planning for women, a majority hold their financial future in high regard, as women tend to be more concerned with their long-term savings. When discussing women and investing, it isn’t surprising that 43% of women fear they won’t have enough saved for retirement, versus 33% of men.³ When looking toward the future, it’s important for women to take financial planning to the next level by bringing investment options to the forefront.

However, investing for women can be a vehicle to financial security rather than a risk. Investing has the potential to help you make progress toward financial goals. Whether building a child’s college fund, saving for retirement or growing your overall wealth, there are many reasons why women should invest. Great for both experts and novice women investors, there are a handful of investing basics that can help you work toward a diversified portfolio.

5 investment tips for financial intelligence

Here are five steps you can take to help you feel more engaged in your finances and empowered in your investing decisions.

1. Know your financial goals. Whether you’re saving for a vacation, a home or retirement (or all three), knowing what you want to achieve can help you make the most of the money you’re investing.
2. Evaluate your investment approach. Whether from a financial professional or a website, evaluations can provide insights into how you approach money and help you understand things like your investment risk tolerance.
3. Seek out a financial professional. A professional can help you better understand your approach to investing, as well as your options. Be clear when discussing what you want for your future. The more candidly you lay out your goals, the easier it will be for them to help you choose the best investments to generate the financial return you will need.
4. Contribute as much as you can. The answer to when to invest is usually now. When it comes to how much to invest, aim for as much as possible, especially early on, to take advantage of compound interest and time in the market. Maximizing 401(k) contributions is a good way to make investing essentially automatic.
5. Engage with your money. Women are less likely than men to talk about money with friends, use finance-tracking apps and watch money-related TV shows.³ Finding resources that offer helpful investment strategies for women can make investing and managing finances less stressful—maybe even fun.

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Offered by U.S. Bancorp Investments