Women are a majority on college campuses and a growing force in the American workplace. But in survey after survey, they rate themselves as less confident—and less knowledgeable—about money and investing than men do. This disconnect can carry a steep potential price. Since they are likely to earn less than men and live longer, women may have a greater need for their savings in their later years—but they would benefit from the kind of confidence that men have in their own investing prowess to get there. One thing is in their favor: When they do invest, their humility and caution make them far less likely than men to trade excessively or to take outsize risks, which can benefit them in the long run. Only 26% of women were confident making their own investment decisions, compared with 44% of men, according to a survey by MassMutual Financial Group of 1,500 participants in its retirement plans published in March. Both were less confident than a year ago.
Women also expressed much less investing confidence than men in recent surveys conducted by market-research firm Mintel Group and Brinker Capital, an investment-management firm that questioned more than 300 clients of 78 financial institutions. Tellingly, the surveys find that neither men nor women feel overwhelmingly confident or knowledgeable about the broader investing process. “Both genders are in horrific need of basic help,” says Manisha Thakor, founder of the Women’s Financial Literacy Initiative. In surveying 2,000 adults about investment accounts that they direct themselves, Mintel found that men were more likely to invest in stocks, exchange traded funds, futures and options, while women were more likely to invest in mutual funds.
Most investors in the survey don’t trade very much: More than half of men and more than three-quarters of women traded, at most, a few times a year. But a third of men said they traded at least several times a month, while only half as many women did. There are other differences: Women are more likely to get their investment information from people, such as financial advisers or family, than from newspapers, books or websites, according to the surveys, and see themselves as risk averse. In the Brinker survey, 42% of men said they were “extremely” or “very” comfortable taking investment risks, twice the rate of women. Women see themselves as more collaborative, while men see themselves as the decision makers. About 60% of married men said they make the investment and financial decisions in the household, the survey found, while fully three-fourths of married women said the decisions are made jointly.