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Studies show that women have better investing outcomes than men, despite claiming less knowledge and confidence, which I find fascinating.
These stats also make me feel quite smug about the countless conversations I’ve had with men who just can’t help but monkey around with their investments, thinking they can time the market and get out before “the crash” and get back in before it bounces back. You might get that right once or twice, but multiple times throughout your savings years? Unlikely.
The reason I think women’s outcomes tend to be better over the long run is really just because we get there almost by default – in general, women tend to be more cautious and shy away from going big in areas where we don’t feel 100% confident that we know what the heck is going on, which means we tend to invest and then just let it ride.
In recognition of International Women’s Day, we asked 14 female financial professionals and educators to offer their advice on how women can become more confident investors. Here’s what they had to say:
Invest in Companies You Know
“If you’re feeling uneasy about investing, think about the companies that you spend your hard-earned dollars with. Are they stores? Do they always seem crowded? After seeing so many people spend a lot of money at Target and Costco, I researched them online as potential stocks to purchase. After confirming they had great business fundamentals, I purchased. It was enough to get me started and interested, and I’ve enjoyed investing ever since.” Monica, Planner At Heart
Open an Investment Account with Just a Few Dollars
“Thanks to innovations in investing technology, you no longer need thousands of dollars to start. You can start investing with as little as $5! Open a brokerage account that allows fractional share purchases, or download a Roboadvisor like Stash, Ellevest, or Wealthfront & get started for less than a cup of coffee.” – Jannese Torres-Rodriguez, Latina Money Expert, Yo Quiero Dinero Podcast
Crack Open a Few Good Books
“If you want to get more hands-on and make more specific choices besides using broad funds (or you just want to understand more WHY these funds can work), start reading. I like the books The 5 Mistakes Every Investor Makes and How to Avoid Them as well as Picture Your Prosperity. One book that helped me really understand how the individual stock market works, believe it or not, was Grande Expectations, which is a book about Starbucks that explains in plain English how a company’s stock might plummet in value, despite its stores having lines out the door each morning.” – Kelley Long, Financial Bliss Coach
Ask the Right Questions
“You don’t have to have an MBA or spend hours per week to be a good investor. Women tend to feel like we should know about this stuff – but in reality no one taught us, and it’s still not polite to talk about, so how the heck are we supposed to learn?! You don’t need to know all the answers; you need to know the questions to ask, and have the guts to ask them.” – Stephanie W. McCullough, Founder, Sofia Financial
Have an Investor Mindset
“Women often take time to get started in the financial markets. Once they do so, they tend to have an investor mindset rather than a trader’s. Studies show women outperform men, as they overcome self-doubt, despite believing themselves to be inexperienced. I am fortunate to have had a female role model, my mom, an investor in our household. Women who can thrive as investors will have the best path toward building long-term wealth for themselves. Women must create their own wealth as they outlive men, save less for retirement than men with fewer years in the workforce.” – Linda, The Cents of Money
Download an Investing App
“For me, the simplest way for women to become confident is investing is to simply start investing. There are many apps and platforms out there that allow any individual to invest, even if it’s just spare change.” – Bella, bellawanana.com
Contribute to Your Retirement Plan at Work
“One of the most rewarding ways to learn about investing is to contribute to your employer’s retirement plan, especially if it matches even just a portion of your contributions. For example, if your employer matches 50 cents on the dollar up to 4% of your salary, you can instantly have a 50% return on your money, increasing your 4% of salary to 6% of salary (subject to any vesting requirements). Once you have contributed, you can select one of the broad market options and watch your money grow even more over time. – Susie Q, Financial IQ by Susie Q
Learn from Successful Women Investors
“Asking how women can be more confident about investing relies on the premise that women aren’t already confident about investing, and I think that’s a stereotype that needs to be broken. There are plenty of women out there killing it with investments, taking care of family finances, and all-around slaying personal finance. There are also women who might not be so confident, and I’d implore these women to check out this list of Women in Personal Finance so that they can see how many amazing women are out there winning. Follow some of the blogs and learn from other women. Let this old stereotype die.” – Melanie Allen, Partners in Fire
Consult an Advisor
“When it comes to investing, as with anything else in life, confidence comes from practice. If investing when you have little to no experience seems daunting, a good way to overcome any uneasy feelings is to speak with someone more knowledgeable, such as a financial advisor. Another thing that will help you make the jump is to invest in tried and true vehicles, such as index funds, while you gain more confidence in your investing abilities.” – Karen, Debt Free Lab
Make the Most of Available Resources
My suggestion to help women become more confident with investing is simply to go out and learn more about investing. There are so many great resources out there, including books, podcasts, blogs, Facebook groups, and other media that will give you all the tools you’ll need to get started. I changed how I looked at investing after reading a book because I had the knowledge and tools to be confident in what I was investing in. – Tawnya Redding, Money Saved is Money Earned
Begin with Index Funds
“I’d like to point out that investing is hardly a men’s club. There are plenty of women killing it at investing. I suggest starting with a robo-advisor like Betterment or Wealthsimple to get your feet wet and gain an understanding of index fund investing. When you have gained some confidence with the process, you can begin to branch out to selecting funds on your own, be it index funds, stocks, or a combo of both. Don’t forget, you’re probably already investing via your retirement plans – and you have some power in the selections there as well. Lastly, lean on other strong women (or men) and find women-focused communities like WomensPersonalFinance.org to support you on your journey!” – Regina, co-founder of WomensPersonalFinance.org and founder of ThatFrugalPharmacist.com
Patience Pays Off
“As a woman, you may feel less than confident to invest. Yet, women are naturally better investors… we’re more patient, conduct thorough research and easily connect personal values to financial goals. Take that first step and get started with investing today!” – Deb Meyer, CPA, financial planner and CEO of WorthyNest
“If you’re not confident about investing, start by following some of the many women in personal finance on social media and reading their blogs. It’s an easy, manageable way to learn a lot about how to invest, what to invest in, and what tools to use, as well as ask for advice from others who are happy to help.” – Amanda Kay, founder of My Life, I Guess
“It can be easy to be daunted by the idea of investing as a woman, with complex, overwhelming information and a need for stereotypical aggressive behavior. These days though, so much has changed and by starting to invest you can really shape and build the life you want. So my advice is to start small, start simple, e.g. use an automated global index tracker – but just start!!” – Michelle, Fire & Wide
The Bottom Line
It’s important to understand there are countless investing strategies and philosophies out there, from opinions on which companies or industries are going to explode or implode, to recommendations on the best way to diversify your savings to take advantage of market movements to even just predictions of how the economy and market will go in the next year.
You can make your head spin if you really want to dig into all the different ideas out there, but the thing you need to know is that no matter what, you just need to do it. Don’t invest money you anticipate needing in 5 years or less and think twice about putting all of your money into one specific company. But beyond that, just being invested is the most important thing.
The biggest mistakes people make with investing usually have to do with over-thinking, over-confidence or over-activity. But if you can, just pick a strategy, continue using it through the years and live your life in the meantime, you should be just fine.
About the Author
I believe that the true meaning of financial security is the ability to make decisions without having to worry about money. There are both factual and psychological aspects of this belief and my mission is to help people find that intersection in their own lives according to their personal values and goals.
I hold the CPA/PFS license and am a CFP® professional, but I don’t sell any products or manage any money. When I’m not writing, I’m working one-on-one with people through my coaching business, Financial Bliss with Kelley Long. I’m also a member of the AICPA Consumer Advocate Council and am frequently quoted in the press on financial literacy issues facing Americans.
I love to apply my own money lessons to my writing as well as break down some of the more complicated financial planning techniques into plain English. My goal in life is for all people to feel able to make their own financial decisions with confidence, being fully aware of the pros and cons of the actions they take.
Disclaimer: The information in this article is not intended to encourage any lifestyle changes without careful consideration and consultation with a qualified professional. This article is for reference purposes only, is generic in nature, is not intended as individual advice and is not financial or legal advice.